starting to catch up with supply and significantly fewer distressed properties
weighing down the system. As 2012 wound down, the national vacancy rate for
owned homes had dropped to 1.9 percent from a downturn high of 2.9 percent.
That's still above the 1.5 percent norm but nevertheless encouraging. The
ever-optimistic National Association of Realtors predicts a 5 percent rise in
median existing home prices through 2013, though most forecasters see a more
modest 3 percent upswing in real estate prices.
Either way, the real estate market is thawing, unless you're living in such
hard-hit areas as California's Inland Empire or dodgier parts of the Rust Belt.
With the new year upon us, here are 10 real estate tips to see you through a
more promising 2013.
Tip 1: Get off the sidelines
For good-credit buyers waiting for the bottom of the market, it has passed,
but the good news is that home prices and interest rates are still quite low.
For sellers waiting for market improvements, they're here. Stretch, take a deep
breath and jump back in the game if your budget allows. The rules have changed a
bit, however, and lenders want buyers to put a little more skin in the game. So
expect to make higher down payments than in those pre-bust years. Another
caution: Sellers will likely find that buyers have a harder time qualifying for
mortgages.
Tip 2: Screen your buyers
Save your time, and weed out the tire-kickers. Make sure potential buyers are
preapproved, which means they've already had their credit and employment
checked thoroughly to determine how much they can borrow. Have your agent call
their loan officers. Serious borrowers will find this acceptable because it
shows they are ready to act.
Tip 3: Create a good impression
Most folks start their home searches online these days, so the number of
murky, drab photos posted on website listings is baffling. Consider hiring
professional photographers or videographers to create an optimal presentation,
particularly for high-dollar spreads. Winter exteriors might show sun shining
off the snow, spring shots could sport blossoms, summer shots ought to spotlight
that shimmering pool or well-coifed lawn, and fall photos might show vibrant
leaves. Think vividly, but not deceptively. Shots should accurately reflect the
depth of rooms. Interiors should show bright, uncluttered spaces and highlight
the best outdoor views. Remove a few furnishings for your photo session and
brighten up (or even repaint) dark rooms
Tip 4: Renovate wisely
A thorough remodeling can help seal a deal, but it rarely pays for itself. In
fact, the average remodeling payback in the past 10 years has dropped from 82
percent in 2003 to about 57 percent, according to Remodeling magazine. Bringing
up the rear are added back-up power generators (47.5 percent return) and sunroom
additions (45.9 percent). Topping the list are steel entry-door replacements
(73 percent return) followed by garage door replacements (71.9 percent). Unless
the place is a wreck, focus on the small stuff: Sellers routinely underestimate
the positive impact of simple home improvements such as repainting and minor
fix-ups, say 3 out of 4 Realtors.
Tip 5: Build your team wisely
Vet the help. This goes for such crucial players as your agent (interview at
least three), your inspector, appraiser, title company and if applicable, your
attorney, surveyor or even energy auditor (a good idea if you're buying a large
home). Look them up at the Better Business Bureau, Angie's List and any of a
number of websites where service reviews can be found
Tip 6: Don't let the heart lead the head
No clinging to false hopes, please. Win the game of "the price is right" by
pricing your house correctly from day one. Find a proven, seasoned agent and
follow his or her lead on listing-price suggestions. Pricing should be based on
comparable sales, specific neighborhood time-on-the-market trends, an up-to-date
appraisal and the home's inherent pros and cons. No amount of marketing
hocus-pocus or staging can overcome a bloated price tag. Cut your price if no
serious offers emerge in the first 30 to 45 days. It's not 2006 again.
Tip 7: Open your marketing options
Give your agent (or yourself) the green light to creatively market your home
in varied venues, be they virtual or terra firma. Sellers are tapping into
Twitter, Facebook, Pinterest, LinkedIn and any number of sites to tickle buying
bones. Agents and owners are customizing websites and blogs as well. But be
tactful and imaginative. For example, a blog called "What you'd like about
living in my town," might cover culture, education and other quality-of-life
niceties -- followed by a playful pitch for your home, of course. Social media,
unlike listings on the Multiple Listing Service or newspaper ads, allow for
quick feedback and Q-and-A. You might also suggest your agent market your home
to foreigners via overseas property sites or local partners abroad and to
corporate relocatees.
Tip 8: Run the numbers
Are you really poised to buy? The housing market is improving, but
that doesn't mean exuberant buyers should write a check and empty their savings
accounts. Back up a bit and first get a free copy of your credit report, then
fix any blips to save on higher mortgage interest rates. Break down your
essential monthly bills and reconcile them against your family income, then use
an online mortgage calculator to see how much wiggle room you'll have once you
buy. Remember to factor in closing costs, inspection fees, loan fees, legal fees
and emergencies.
Tip 9: Work your ground game
You're not just buying brick and mortar, you're buying a neighborhood.
Consider this short checklist before making your buying decision.
- Do a criminal search, including the ZIP code's crime statistics and the
National Sex Offender Public Website at NSOPW.gov. - Chat up residents about pros and cons of the neighborhoods.
- Visit at different hours; be wary of poorly kept homes and yards, unsavory
visitors, traffic and pet noise, industrial or landfill odors, blaring train
horns, too-bright lighting, and vacant-but-developable commercial lots. - Practice your work commute and find mass transit options.
- Research school performance and student-teacher ratios.
Tip 10: Leave nothing to chance
Switch on that stove, run the faucets (including the baths), check the water
pressure, activate the sprinklers, turn on all the lights, flush the toilets,
turn on the air conditioning and heat, test the remotes and venture into the
closets and look for signs of brown splotches or fresh paint for evidence of
roof leaks. Granted, you might not feel comfortable doing all these at the open
house, but you certainly can at the final walk-through. Sometimes agents and
inspectors miss things.