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What Is The Difference Between A Mortgage Broker and Lender

When you’re ready to get a mortgage, you face a dizzying array of choices: Fixed rate or variable? Points or no points? Mortgage broker or mortgage lender?

That last decision – mortgage broker or mortgage lender – involves a simple but easily misunderstood distinction.

Simply put, a mortgage broker is an independent professional who can shop around to find deals from a variety of lenders. A mortgage lender is represented by a loan officer who can speak only for that institution’s product line.

What does that mean for the borrower? As a practical matter, a mortgage broker can present you loan packages from multiple lenders – for instance, Wells Fargo, Chase and Quicken Loans. The loan officer from Wells Fargo, on the other hand, can pitch only Wells Fargo mortgages.

The advantages of dealing with a lender include reliability and reputation. With a broker, you have greater flexibility. Based on your financial profile, the broker may also line you up with a lender where you’re most likely to qualify for the loan.

When in doubt, comparison shop

So, which one should you use? There’s no clear answer, says Eric Tyson, author of Personal Finance for Dummies and co-author of Mortgages for Dummies.

“I’ve seen people be happy using either option,” Tyson says. “The important thing is to shop around.”

Tyson suggests soliciting loan packages from a mortgage broker and a couple of mortgage lenders, then judging which proposal offers the best deal based on rates and fees.

In the end, whether to use a mortgage broker or mortgage lender depends in part on your finances. If you have stellar credit and steady income and you’re shopping for a plain-vanilla loan, mortgage rates and loan fees are unlikely to vary much from one lender to the next.

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If, on the other hand, you have spotty credit, you’re self-employed or you have an otherwise-tricky profile as a borrower, you may find the number of mortgage lenders willing to do business with you is more limited. In that case, it can be more convenient to use a mortgage broker. After all, they make a living from their knowledge of various loan products.

Laws offer protection

Unfortunately, the image of both mortgage brokers and mortgage lenders was tarred by a minority of unethical practitioners who built an unsavory reputation for themselves during the housing bubble. The movie The Big Short, based on author Michael Lewis’s expose on the U.S. mortgage meltdown of 2005, portrayed greedy mortgage brokers going so far as to target exotic dancers with bad loans. In another example, The Miami Herald reported in 2008 that thousands of convicted criminals were given mortgage broker licenses by the state of Florida. Not to be outdone, many mortgage lenders offered a menu of high-fee, high-risk loans.

Those excesses have largely gone away, however. The Consumer Financial Protection Bureau, created in 2010 to ride herd on the mortgage industry, released guidelines in 2014 that included a ban on “steering” – that is, on financial incentives for loan officers to push you into a loan you can’t afford. Lenders have stopped offering some of the risky loans that drove the housing bubble, and mortgage lenders and brokers operate under heightened levels of scrutiny and disclosure.

Tipping the negotiation in your favor

Whether you opt for a mortgage broker or a mortgage lender, the paperwork burden will be similar. Both will run a credit check, and both will ask for tax returns, pay stubs, bank balances and other information required for the lender’s underwriting process.

But payments for brokers and lenders are different, and understanding how the broker or loan officer is paid may help you land a better deal. Mortgage brokers are typically paid a commission by the lender – usually 1 percent to 2 percent of the amount of the loan. For loan officers at banks, compensation models vary. They might be paid a commission, but they typically collect a salary plus bonus.

To win your business, a mortgage broker might be willing to negotiate his fee, Tyson says. And the larger your loan, the more negotiating power you have.

Position Realty
Office: 480-213-5251

Its A Smart Decision To Buy A Home Over The Holidays

You know that play in football where the quarterback seems to hand the ball off to a running back and the entire defense concentrates on that “runner,” only to find that the ball ended up in the hands of someone on the other side, who then sprints down the sideline and scores a touchdown? That’s pretty much what it’s like to buy a home during the holidays. While everyone is busy looking at all the pretty, shiny things and on-sale things and yummy things, you’re sneaking around the other side with the ball, or, rather, the offer, that gets you the house you want.

Yes, when it comes to homebuying around the holidays, it’s advantage: buyer. With so many distractions between Halloween and New Year’s Day, you can slide right in there and make a smart move. So why, exactly, does it benefit you to buy a home over the holidays?

Because you just want to find a home already

The market has been hot for a few years, and, in many places, multiple offers and over-asking-price sales have become the norm. Competing in those markets can be demoralizing. Tales of buyers seeking million-dollar fixers on Los Angeles’ Westside just so they can get into something in the area – and being consistently outbid for more than a year – are more and more common.

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But buy over the holidays and you slice through the buyer pool. While others are trimming their tree or searching for the perfect pumpkin cheesecake recipe, you’re off snagging the home you want.

Because: First-time buyers

The above scenario, where buyers are constantly being outbid on homes, is a nightmare for first-timers looking for a home. Not only is there a verrrrrry limited supply of available homes that are affordable in the first place, but the number of folks that are vying for them is tremendous. If you’re in the market and have never done this before, you’re probably pretty frustrated.

There are time-tested tips for winning in a multiple-offer situation, like getting preapproved, limiting contingencies on the home, being flexible about the closing, and writing a “love letter” to the seller, which can appeal “to the heart can make your offer stand out,” said NerdWallet.

But acting during a time when others may be distracted and not actively searching is perhaps the most effective method of getting what you want. “About one million consumers will purchase a home from November to January this year, when home prices are a bit softer,” said Forbes.

If that sounds like a big number, consider this: “More than 85 percent of buyers who say they plan to buy a home in the next year say they will wait until the spring or summer,” according to data from Realtor.com’s “Top Tips for Home Buyers and Sellers in 2016” survey.

Because you might actually get a deal

No one likes to overpay, regardless of their price point. And multiple offers that drive up home prices are a drag for everyone (but the seller!). If you consider that those who are selling their home during the holidays are generally doing so because they have to, not because they want to, it makes sense that when you do find a house, it might be priced better than anything you’d find months later. In fact, according to The Balance, “Home prices typically drop to a 12-month low” in the month of December.

“Sellers tend to avoid the end of the year due to the short days, wintry weather and conventional wisdom that says buyers are otherwise occupied, Tim Deihl, associate broker at Gibson Sotheby’s International Realty in Boston, told Bankrate. “But those who do choose to sell at year-end are often under pressure and highly motivated to cut a deal. A seller who’s looking to move a piece of real estate during the holidays is a seller who needs to sell, because nobody in their right mind would pick that as the most convenient time to list their property. And that’s why the year-end might be a smart time to buy: Determined house-hunters can take advantage of sellers’ urgency.”

Because what better present could there be?

You might want a new KitchenAid mixer or a flat screen or a weekend getaway. But do any of those things compare to a new home? The answer is no. No, they don’t. If you’re stumped at what to get your honey or your family, or what to ask for, here it is. And, if you time it right, you might even be able to get that home on Christmas Day.

“Almost nobody looks at homes on Christmas Day. It doesn’t matter whether you are a Christian nor whether you celebrate that holiday, there are much lower numbers of buyers shopping for a home in December,” said The Balance. “But buying on or near Christmas Day is a smart move.”

In addition to all the other reasons the Christmas holiday season is so attractive for buyers, “People are in good moods, celebrating, opening presents, enjoying family and, let’s face it, some are a little tipsy,” they said. And, “People are more inclined to be generous, even if it means coming down on the price. Of course, the key is to find a real estate agent who will a) work on Christmas and b) be aggressive enough to worm her way into the seller’s home without batting an eyelash.”

Position Realty
Office: 480-213-5251

Smart Homes: The New Frontier For Cyber Crimes

For years, research has highlighted various security flaws in millions of internet-enabled “smart” gadgets. But it wasn’t until recently, when “Internet of Things” (IoT) devices like DVRs and webcams sustained a massive breach, that these security flaws became a pernicious reality.

The hackers were able to corrupt and co-opt these ordinary smart devices into a colossal botnet army, where they levelled a deluge of junk messages at Dyn, an internet management company that routes web traffic for popular websites, including Twitter, Netflix, Reddit and Amazon. The sheer volume of bogus messages caused Dyn to crash, and as a result, users were cut off from many of those sites. The hacker remains unknown, but their weapon of choice, at least in part, has been identified.

Mirai, an easy-to-use software, infiltrates household devices, harnessing them for their own exploits unbeknownst to the owner. The cameras that were hacked and manipulated had low-end security features – and users had largely neglected to update factory-default usernames and passwords.

While this attack may conjure up large-scale cyberwarfare scenarios, it also underlines a very real and growing need to beef up security around the smart home, which has been severely lacking since the beginning. And if the problem isn’t dealt with, it’ll only continue to grow: Cisco Internet Business Solutions Group projects smart devices will reach 50 billion by 2020, a significant jump from 15 billion today. Intel estimates the number to be around a whopping 200 billion devices.

Why are smart home devices so easy to hack into?

In the face of economic demand, smart devices’ security has largely fallen by the wayside, as they’re perceived as a time-consuming expense. Many of the DVRs and webcams involved in the Dyn attack were shipped with factory-default settings and didn’t require consumers to create a new username or password. Consequently, these users unwittingly became a target for Mirai, which enlisted their devices in a campaign against specific websites.

But even for users savvy enough to update their defaults, hackers still have more obscure means of infiltrating their smart devices. Not-so-user-friendly services like SSH and telnet offer an advanced access point for hackers, since the password hardcoded in the device isn’t the same as the password on its web app. And unfortunately, the task of changing the password hardcoded into the firmware is likely too ambitious for the average consumer.

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What are the security risks involved?

Smart home devices “learn” by gathering and exchanging data to tailor their operations around the unique habits of the household. For instance, a smart thermostat’s data-gathering sensors can detect when people are home and learn the temperature settings of the home’s occupants. The more integrated smart technology becomes, the more sensitive data they can accrue and use for optimal customization.

However, increased connectivity also means a single access point could easily provide cybercriminals a terminal to the home’s central hub, where they can pirate other smart devices using the same Wi-Fi network. From there, hackers have access to all sensitive data, including when people are home, banking information, credit information, sensitive documents and more.

As opposed to a home break-in, which typically involve obvious signs of forced entry, these types of attacks are far more insidious and create a new form of anxiety for homeowners. A smart door lock could be furtively manipulated remotely, and connected home monitoring systems could be corrupted and used to spy on the home’s inhabitants without their knowledge. The risks abound, and smart home security currently relies too heavily on the end user.

So what can users do to better protect their smart devices and themselves?

While it’s clearly not the be-all and end-all remedy, changing default settings should be your first order of business. Make sure passwords are updated at least once a year and never use names, addresses or birthdays; and while it should go without saying, passwords like “admin,” “1234,” and “password” should never, under any circumstances, be used.

On top of effective password management, though, consumers should implement an extra authentication protocol, such as a one-time pin you’d receive by text to prevent unauthorized users from gaining access. Biometric authentications are another method gaining popularity, which rely on a unique thumbprint, eye-scan or the user’s unique keystrokes, making it difficult for hackers to bypass.

Unlike your smartphone, most IoT devices don’t automatically prompt you to run a software update. So about once a month, open your smart gadget’s corresponding web app and check for firmware updates. It’s even a good measure to check for updates that might’ve been released between the time the device was manufactured and the time it arrives on your doorstep.

In the event of a security breach to your home, immediately update passwords, notify credit card companies and file a police report. Always avoid public Wi-Fi networks, and don’t keep gadgets on the same network as your PC. By segmenting Wi-Fi connection, you can at least minimize hacking across different devices.

Although the onus is on smart-home-device manufacturers to escalate built-in security, users should nonetheless be as vigilant about their usage as they are with credit cards, computers, sensitive documents and locking the front door.

Position Realty
Office: 480-213-5251

How Donald Trump’s Policies Could Affect Phoenix Homeowners

Billionaire Donald Trump made much of his fortune as a real-estate developer.

But it’s not yet clear what his presidency will mean for the wealth of homeowners, though many of us are trying to figure it out.

President-elect Trump’s plans for Wall Street, immigration, a border wall and builder regulations could all impact the housing market, particularly in Arizona.

Let’s examine how some of his policies could affect homeowners here:

Interest rates

The most immediate impact on the housing market came right after the election when mortgage rates jumped. Homebuyers and homeowners trying to refinance across the country were jolted as the 30-year mortgage rate jumped above 4 percent early last week. Some buyers balked, and mortgage applications fell 9 percent.

A drop in home sales can turn into slower appreciation in values and a stalled recovery. But the current higher interest rates aren’t all on Trump.

Rates were rising before the election as investors jittery about the market poured more money into Treasury notes, pushing up their yields and mortgage rates.

Banks and lending

One thing we do know is Trump wants to quickly dismantle the Dodd-Frank law that went into effect six years ago in the middle of the crash. Dodd-Frank covers a lot including protecting consumers from predatory lending and regulating banks from getting too big to fail as well as investing in hedge funds. The goal of the package is to prevent a repeat of the crash.

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“If the government decides to dismantle Dodd-Frank as proposed, allowing banks to grow even bigger, credit availability could loosen nationwide,” said Ali Wolf, manager of housing economics for the national real-estate firm Meyers Research.

“Proponents, including former Federal Reserve Chair Alan Greenspan, believe Dodd-Frank was a ‘disastrous mistake’ that kept credit markets too tight,” Wolf added.

Mark Stapp, real-estate expert and director of the Master of Real Estate Development program at Arizona State University, told me that any impact on the capital markets that make it easier to get a loan would be positive.

But there’s concern among other housing advocates that too loose of lending guidelines get us back to the bad loans that led to the boom and crash.

Immigration

What could affect the housing market the most in Arizona are the president-elect’s plans to deport undocumented workers and build a wall between the U.S. and Mexico.

Originally, Trump’s plan called for deporting 11 million immigrants living illegally in the U.S. More recently, he said he would focus on deporting a smaller number, particularly the criminals living illegally in the country.

Arizona housing analyst Mike Orr said the number of deportations are key.

“Will he deport 10,000, 2 million, 3 million or 12 million, and over what time period?” Orr said in an analysis for this column.

He said 10,000 will have no significant impact on metro Phoenix’s housing market. Two million “will create significantly lower demand for housing. And 12 million would devastate housing.”

Building a wall would impact Arizona’s population but also will likely mean more jobs while its being built in our border state, he said.

About 190,000 metro Phoenix residents aren’t in the U.S. legally, according to national research. That many people translates to about 100,000 Valley households.

“Overall, a smaller population means a smaller economy,” Orr said about both immigration and the proposed wall.

Proponents of Trump’s immigration plan, including Sen. John Kavanagh, R-Fountain Hills, have told me the Trump deportation plan can benefit metro Phoenix’s housing market..

“It’s a solution to getting more affordable housing,” he said. “The argument suggests that if people here illegally left, no one would take their place. I don’t think that’s true.”

Kavanagh believes the jobs and homes left vacant by Trump’s deportation plan would be filled by “millions of people who are waiting to come here legally.”

We all will be watching this closely.

Builder regulations

Homebuilding hasn’t recovered from the crash in metro Phoenix, though that part of the market is having its best year in nearly a decade.

In an August speech to the National Association of Home Builders, Trump said the homebuilding industry is overregulated

He estimated that 25 percent of the cost of a home comes from regulations and said the figure should be closer to 2 percent.

Arizona has much lower homebuilding regulation costs than California and the East Coast, so this move by the president-elect could have a smaller impact here.

Also, Stapp said, “claims of eliminating regulations to lower fees are suspect because most are local and not federal.”

He thinks a Trump policy that focuses more on helping increase demand from homebuyers instead of trying to “marginally” cut federal building costs will be better for the housing market.

Trump inherits an economy with a housing market nearly recovered from a catastrophic crash. President Barack Obama came into office eight years ago as the economy and real-estate markets were in free fall.

Now that the new president will be renting at the White House, it’s important for our incoming president to redirect his real-estate expertise from his own portfolio to the nation’s homeowners.

Phoenix Residential Market Report ~ October 2016

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The current real time market profile shows there were approximately 10,023 new listings (up 85 listings from last month) on the market in October 2016 and 7,100 sold transactions. The overall inventory of homes on the market is down -16.4% in October 2016 as compared to the number of home on the marker in August 2014. The current number of home on the market is equivalent to houses on the market in September 2015 but due to the greater demand this year the low inventory of homes on the market may cause prices to appreciate at a faster rate. There is currently 22,986 listing on the market and 7,100 sold transactions which equates to 3.2 months of inventory at the market.

In July 2016, the average sold price took a steep dive south to $272,845. The month of October the average sold price increased approximately +4.4% to $284,888 which is higher than the average price in June 2016 at $282,879. Historically, as we enter the winter holiday season the number of sold transaction will decrease but since 2014 the average sold price increased. In 2014, the average sold price increased +5.3% from September to December and in 2015 the average sold price increased +3.6%. Another interesting factor to consider is how the election of our new president will affect real estate prices. After the election mortgage interest rates increased making it harder for people to buy. Since November 2015 (12 months ago), the average sold price has increased approximately +7.6% (up from last month), the average days on market has increased approximately +1.4% (up from last month) and the number of sold transactions has increased approximately +32.4% (down from last month).

The volume of foreclosure purchases since November 2015 (12 months ago) has decreased approximately -22.2% and the volume of short sales decreased of approximately -15.1%. Since August 2013 the number of foreclosures have decreased -298.7% indicating a healthy market. Also, since August 2013 the volume of short sales have decreased -451.6% because the inventory of homes “up-side-down” have been exhausted and values have risen to a point where consumers can break-even or sell with some equity but some homeowners are still up-side-down if they purchased their homes between 2005 and 2007.

Since November 2015 (12 months ago), the number of homes for sale on the market have decreased approximately -2.5% or 23,585 homes for sale on the market to a gradual decrease of 22,986 homes. The total number of listings is low as compared to 26,076 listings in August 2014. This decrease in the number of homes for sale indicates we are currently in a seller’s market (low supply and increased demand).

Real estate prices are still relatively low (near 2008 prices), mortgage rates are still at a historical low and the macroeconomic market is improving both in terms of prices and the overall economy. Give us a call to discuss your best buying or selling strategy, TODAY!!

Position Realty
Office: 480-213-5251

View All Homes For Sale In Sun City

Single-family residences are detached homes with front and back yards, a driveway, and an attached carport or garage. Many homes are built on golf course lots which give owners open views of the course and the fairways. Sun City AZ has two man-made lakes that are surrounded by homes and duplex units offering the owners excellent views across the lake. There is also a section in Sun City AZ called Rancho Estates. These are single family homes on acre-size or larger lots with horse privileges. Not all of the Rancho Estates homes currently have access to the recreation facilities in Sun City AZ.

The community has seven recreation centers, eight golf courses, two bowling centers, an outdoor amphitheater, a 33-acre man-made lake, and Duffeeland dog park. Today, over 120 chartered clubs offer something for everyone! Arts and crafts clubs such as stained glass, weavers and knitters, ceramics, quilters, clay, leather craft, china painting, silver craft, lapidary and woodworking are available for those with or without experience. Numerous educational, sports, dance, exercise, music, and card and game clubs are also available. A variety of social clubs, as well as other clubs, such as photography, gardening, and a dog club all provide an excellent opportunity for residents to become active and involved in their community. With literally dozens of clubs, if there is not a one in Sun City AZ that suits your fancy, all you have to do is start one.

Position Realty
Office: 480-213-5251

Less Is Always More When Staging Your Home

Embrace your inner minimalist when prepping your home for sale. Here’s a room-by-room guide:

Declutter. Edit your space. Get organized. You’ve probably heard all sorts of classic advice like this for getting your home sale-ready. But it’s helpful to know the goal behind these tips.

By paring down and minimizing distracting elements in your home, you give potential buyers the ability to imagine themselves living inside it. A clutter-free environment allows the space, beauty and intrinsic value of your home to shine. Beautiful wood floor details might be concealed with too much furniture, or pleasant natural light might be obscured by heavy drapery. So edit your home by replacing and eliminating unnecessary, distracting and cumbersome items. Below, we break down this less-is-more approach for each room.

When It Comes to Living Rooms

Keep only essential furniture. The living room is often the most used room of the house, and it may collect extra furniture that isn’t typically categorized as living room furniture. The key to staging this space is to stick to just the essential pieces: typically a sofa, coffee table, rug, accent chair and media console.

That corner desk with a computer on it may be essential for the way you live – but it’s not great for the room. While your home is on the market, perhaps find an alternate workspace or use a laptop. Similarly, if you need that end table to hold a much-needed table lamp, then leave it. But if you have two end tables, perhaps you don’t need both. Having fewer pieces will help the space feel larger.

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Use only proportional pieces. Once you’ve edited, ask yourself if the living room feels spacious or cramped. If the living room still feels crowded, consider the size of your furniture. Are any pieces overwhelming for the size of the room? If so, try replacing that oversized piece with something smaller and compact. You might find substitute pieces in other rooms. Or, if the problem is a large sectional sofa, perhaps remove a section. Don’t worry about reducing seating. The goal is for the room to read larger so that it appears as a desirable living space.

Place furniture strategically. Next, bring your editing eye to the furniture placement. Are pieces placed in a way that makes the room spacious and bright? For example, if an item is sitting in front of a window, you’re likely blocking light. Rearrange to showcase the room’s best natural light. Play with the placement, angling pieces, using corners of the room to open up the space.

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Pare down accessories. Next move on to your decorative accessories, including wall art. Do these items detract from the positive features of the room? Try removing all accessories and wall art, then adding back one piece at a time. Stop when the room looks simple, with just a touch of personality. Throw pillows are a good example: While four coordinating ones may make a lovely design statement, using just one or two allows visitors to pull back the focus to the entire room.

You also may want to edit your bookcases, displaying select books with a mixture of neutral accessories. You’ll want to remove most framed photos, though it’s OK to keep one or two images that are more vintage, such as snapshots of grandparents or an old baby photo. This gives a little life and personality to the room without showcasing your entire family album – a definite “no” in home staging.

Time to Tidy the Kitchen

Keep surfaces clear. Think about those fabulous kitchen showrooms: gleaming counters and stove-tops, organized refrigerators. That’s how you want to present your kitchen. Make sure the surfaces are as clear as possible and that every nook and cranny is clean. Keep smaller accessories such as coffee makers to a minimum, and make sure they, too, are spotless.

Organize your cabinets and pantry. People considering purchasing your home will likely look behind closed doors, so give your kitchen cabinets and pantry a good edit. Organize, discard or give away anything messy or that hasn’t been used in a while. Make everything in your pantry look more appealing by storing items in inexpensive Mason jars or canisters.

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Next, pare down and organize the contents of your refrigerator. Buyers will be paying a lot for your appliances, so make them look appealing. As with the pantry, you might try placing smaller foods such as vegetables in plastic bins. This will not only organize your fridge, but be visually appealing.

Spiff Up the Bedrooms

Remove excess furniture. Furniture in the bedroom adheres to the same principles as the living room. Do you have extra furniture in the room that suits your storage needs but makes the room feel smaller? Keep in mind that what’s practical to you might scream “No space!” to someone else. See if you can eliminate any extraneous furniture and storage pieces, finding alternative storage solutions for the items they contain. One option is to use large plastic storage bags under the bed for off-season items. If under the bed isn’t possible, perhaps a concealed space such as a closet or the garage will do the trick.

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Replace oversized beds. Another important guideline is to look at the size of the bed in the room. Specifically, is the bed too large for the space? A common staging faux pas is leaving a king-size bed in a small bedroom. This makes the room feel small, when it might in fact look spacious with a queen-size bed. Another mistake is to leave a queen or full-size bed in a minuscule guest room that’s better suited for a pullout sofa.

Edit your accessories. Similar to elsewhere in the house, keep the accessories and knickknacks in bedrooms to a minimum. Try storing everyday sundries in decorative boxes placed on a dresser. To open up the space with wall art, use only minimal coordinating pieces or a mirror.

Show your closet some love. As a final step in the bedrooms, spend some time making closets look, at the very least, neat. Jumbled messes won’t make potential buyers want to move in. Quite the opposite. They may feel the mess shows that there isn’t enough room in your home to live well. Take the time to edit your closet and be realistic about keeping each and every item. You’ll be surprised how much you’ll get rid of.

Closet Organizing

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Don’t forget the kids’ rooms. While kids may have many more smaller items like toys, books and school gear, editing their toy chest, closets and shelves ahead of time will prove helpful for your move. Similarly, organizing the items in their rooms in visually appealing containers will present a happy environment to a prospective buyer.

The Final Step: Styling the Bathrooms

Less is definitely more when it comes to staging a bathroom. Buyers don’t want to see anything personal. Surfaces should be clear of toiletries. Showers should only show the bare minimum. Opt for a pretty liquid soap dispenser in the shower while you sell your home. Remove any extraneous artwork or knickknacks on shelves. In fact, pare down the bathroom to its bare minimum fixtures and hardware, and, most importantly, clean it until it’s gleaming.

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Tell us: What have you done to present a home successfully to potential buyers? Share your experiences and advice in the Comments.

Buying To Renovate: What You Need To Know

If you’re looking for a house that’s not exactly turnkey, you’re not alone. Call it the HGTV effect. Is anyone else OBSESSED with House Hunters Renovation?!

“So you’re thinking of buying a fixer-upper? Maybe you’re a do-it-yourselfer, or you just love this home so much that you don’t mind lavishing extra TLC on it in the years to come,” said U.S. News. “Or perhaps you’re enthralled with home renovation television programs where every home has a camera-ready happy ending.”

Yes, buying a house in need of renovation definitely has its advantages, starting with the ability to make updates that match your style and (hopefully) increase the value of the home. But it also comes with its fair share of challenges. Here’s what you’ll want to know before you make that offer.

Not every home in need of renovation is a diamond in the rough

Some homes might just be too far gone to bring back to life. Or at least too expensive to be a good deal. There is a reason “movie plot lines have been based on the darker idea that rehabilitating a home can result in disaster,” said U.S. News. “Sometimes fixer-uppers turn out to be dismal downers.”

It could be that the house hasn’t been maintained properly and has serious issues that are going to increase the timeline and drive up the renovation costs. Maybe it needs work that’s well beyond your scope – and budget.

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“If the house needs significant structural improvements, many real estate experts recommend avoiding it altogether,” said This Old House. “That’s because major repairs – plumbing and electrical system overhauls, foundation upgrades, and extensive roof and wall work – are usually ‘invisible’ and hardly ever raise the value of the house enough to offset the cost of the renovation.”

Inspection, inspection, inspection

Some homes in need of renovation are purchased as foreclosures or at auction, but the problem therein is that you might have to buy “as is.” That means you don’t get to inspect the home before purchase or request any repairs from the seller when you uncover problems.

It goes without saying that this is an idea that is often frowned upon—especially for those who are inexperienced in home renovation. Buy a home “as is” and you may end up with a great big money pit. Making sure your home is inspected before you purchase can help you see the full picture and decide whether it’s a good buy—or a goodbye.

Think about bringing in an architect and an engineer, too

If you’re planning on knocking down walls (and aren’t we all!), you might want to consider hiring an engineer and/or an architect early on. Structural walls or surprises inside the walls like plumbing or HVAC may make the open floorplan you’re dreaming of unachievable – or at least really expensive. It pays to do your due diligence before you purchase, even if it costs a little more upfront.

Who’s doing the renovating?

Planning on taking on some or all of the renovation yourself? Are you a first-timer, an old pro, or somewhere in between? If the grand total of your experience is patching a few nail holes in your college dorm room, you might want to think about hiring a professional.

Some things, like tiling or installing hardwoods, and some types of demolition, can be taught in a clinic at your local home improvement store, or even on a video on YouTube. Other skills like roofing, plumbing, and electrical work are usually best left to the pros. Keep in mind that, depending on what you plan to do to the house, you may also need permits before any work can begin.

There’s a loan for that

Financing is an important factor when buying any home. A traditional mortgage won’t pay for your repairs and updates, and most people aren’t super excited about shelling out a bunch of cash for renovations on top of their down payment and closing costs.

“If you’re buying a home that needs a little TLC, a typical fixed-rate mortgage isn’t going to help you pay for repairs,” said Interest.com. “Your lender isn’t going to approve a $300,000 loan to buy a home that’s only worth $250,000. And, while homeowners sometimes use home equity loans to remodel, you can’t get a home equity loan when you have no equity. This can be a big obstacle for buyers who don’t have extra cash to make needed renovations or repairs before moving in.”

Thankfully, there is another alternative. Several loans build cash for renovations right into the terms. “Four government-backed loan programs are designed for purchase-remodelers,” said Bankrate:

  • FHA 203(k)
  • Streamlined FHA 203(k)
  • Fannie Mae HomeStyle Renovation mortgage
  • Fannie Mae HomePath mortgage

“Each program bases the loan amount on the value of the home after renovations are complete,” they said. You’ll want to talk to a lender and get preapproved prior to finding a home to streamline the purchase process.

Position Realty
Office: 480-213-5251

WHAT TO LOOK FOR WHEN BUYING A SMART HOME

Avoid Temptations And Be Smart When Buying A Smart Home

Homeowners are turning to smart homes to enjoy more security, convenience and peace of mind. In the past, these homes were the domain of the rich. Currently, developers are seeking to address the needs of homebuyers from both sides of the spectrum. By shopping wisely, you can find a smart home that suits the tastes and preferences of your family without spending a fortune. The following tips will keep you on the right track and help you to make a smart decision.

Smart Homes are Cost-effective

A few decades ago, smart homes were beyond the reach of the average home-buyer. Today, these homes are becoming common in the middle-income neighborhoods since they come with energy-efficient features that make them cost-effective in the end. While you need to invest a fortune to acquire a smart home, the intelligent features that maximize the solar energy and thermostats that regulate the power depending on the climatic conditions will help you to avoid wastage as well. The modern technology will help you to reduce your utility bills and lower your overall costs.

Keep an Eye on Customization

If you are dealing with an agent, it is easy to generate a list of must-haves, tastes, and preferences when hunting for a smart home. However, if the house is for sale by the owner, it could have been customized to the owner’s preferences. If you want to avoid frustration, make sure that the house suits your needs as well. If you are not vigilant, you might end up paying dearly for items that you do not need while missing your preferences. Ensure that you come up with a list of deal breakers and confirm that the home ticks all the right boxes before you sign on the dotted line.

smart-home

Stay on Budget

Smart home developers aim to woo the rich and famous with extravagant perks that go beyond their wildest dreams. But, how much is too much for the average buyer? Automatic burglar proofing devices that alert you when thugs invade your home, or laser-sensitive gates that open when you drive in are welcome, but smart toilets that perform dialysis tests could be out of your price range. While the modern features have brought many benefits to the contemporary homeowner, make sure that you are not paying for something that you do not need. If you want to enjoy the comfort without breaking the bank, you must avoid the temptation to go overboard.

Make the Right Decision

While buying a smart home, do not forget the basics of real estate investment. Many people fantasize about the endless list of automated devices and unfortunately, they ignore the importance of good location, neighborhood amenities, good school districts, and so on. When buying such a home, focus on the resale value. Whenever you want to sell you home in the future, the prospective buyers will have several issues to consider. However much you automate your home, you will not get value for money if the house does not meet these prerequisites. Do not let the luxury of an automated home coerce you to make a poor investment decision. Instead, buy the right home first, and then decide what to automate.

Think about the Future

Modern technologies change on a daily basis and the state-of-the-art devices in your home today might be obsolete in future. Before you invest on any smart device, you must do your homework, identify the features that are trending, and anticipate the future. Whatever the cost of your smart home, you do not want to end up with a dinosaur when the curtain falls on the current technology. In addition, if you customize the house to your needs, remember to tone it down a little to avoid difficulties when it comes to selling it down the road.

Position Realty
Office: 480-213-5251

TOP TIPS FOR SELLING YOUR HOUSE IN FALL AND WINTER

The temperature is dropping, the leaves are changing, and pumpkin spice everything has taken over the world. With fall color and produce so prominent at this time of year, you may be tempted to load up your home with an abundance of both. But if you’re trying to sell your home now, a little discretion may go a long way. And that’s just one of the tips for selling your house in the fall and winter.

Pay close attention to your curb appeal

We’ve admitted to having a problem resisting the temptation to buy every available pumpkin and decorative gourd at the market at this time year, so we feel your pain. But when it comes to styling your front porch, there’s a slippery slope between nicely decorated and Farmer’s Market.

The idea is to enhance your curb appeal, not obscure it. “While too many fall decorations will take focus off of your home and its best features, a few tasteful accents can create an inviting setting and make your home feel fresh,” said HGTV.

You also want to make sure that fall leaves haven’t taken a toll on your yard. Buyers may be understanding if your lawn is covered and unkempt, because they’re living the same reality, but that doesn’t mean the home will make a good impression.

curb-appeal

Go easy on the gore

You may love the idea of blood and guts and skeletons rising from your yard and headless individuals hanging from your trees, but will buyers be amused or afraid? Anything that has the potential to turn them off is a no-no when listing your house. Sticking to safe decor choices will help you appeal to the masses.

Go easy on the holiday displays, too

Apply the same logic when it comes to Christmas decorations. Tasteful displays will, quite literally, show the home in its best light. Outfitting the home to compete with the Griswolds will make it a spectacle, but not necessarily saleable.

Let In the Light

It’s always a good idea to open blinds and make sure windows are sparkly when trying to sell your home. But especially with shorter days in the fall and winter, you want to make sure you maximize the light in your home, which can make it look larger, fresher, and also “highlight your home’s best features,” said HGTV. Still need a little help? “Let in as much natural light as possible…and place plenty of lamps throughout your home for additional illumination.”

Make your space inviting

As the weather cools down, a warm and cozy atmosphere will give potential homebuyers a warm and cozy feeling. Use plush throws on the couch and beds, add fall-accented pillows to couches and chairs, and, “Try displaying vases of fall foliage or bowls of seasonal fruit throughout your home,” said HGTV.

Prepare your fireplace

A roaring fireplace during showings adds to the welcoming feeling. But, even if you’re not yet ready to light a fire, making the fireplace look great is important. Clean those doors well, and sweep out the inside, too. If the paint inside your fireplace is wearing away, a fresh coat will help. Now, stack that wood nicely or replace it with some modern glass, and you’re ready to go.

Use fall scents to your advantage

Cinnamon and pumpkin spice and vanilla, oh my! The flavors of fall are unmistakable, and when they’re flowing through your home, you can create a powerful connection with buyers.

“The fall and winter months are associated with certain smells and flavors (think: pine needles, cinnamon, peppermint and pumpkin pie). Beyond setting the mood with decorations, you could try appealing to buyers’ senses in multiple ways,” said Smart Asset. “For example, if you’re hosting an open house you could keep hot chocolate and pumpkin muffins on hand for visiting buyers. If you don’t want to go that far, keeping a scented candle burning in the background or playing some holiday music can work wonders.”

Position Realty
Office: 480-213-5251

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