Tips for Northern Kentucky home sellers to get their property sold as quickly as possible. Tips for home buyers in the Northern Kentucky Real Estate Market to help them be informed and able to go thru the buying process with ease and confidence.
Purchasing a new home takes some serious prep work—from cleaning up your credit score to amassing a down payment. But, hey, we're just getting started! You also need a comrade in arms: a close ally to help steer you toward homes you'll love more than life itself, find the best possible mortgage, and all in all help you through this emotionally and financially taxing process. That's where a good real estate agent can make a world of difference.
Here's how to find one who's got your back. And your front. Every side, actually.
Know what different titles mean
The first thing you might notice while trying to find home-buying help is all the different titles: agent, broker, Realtor®, etc. Are they all the same thing? Not exactly.
A real estate agent is anyone who's earned a license to sell property, which typically entails taking 100+ hours of course work and then passing a state exam. A broker is someone who's continued his studies and can hire agents to work under him. A Realtor is either an agent or broker who is a member of the National Association of Realtors®. Realtors adhere to a detailed code of ethics to treat their clients honestly and fairly. Consider it added insurance that they're committed to your cause.
Conduct a preliminary search online
We shop online for everything these days, and finding a real estate agent is no different. To locate ones in your area, use online tools such as realtor.com®'s Find a Realtor search, which will give you useful info such as the Realtor's number of years of job experience, number of homes sold, and the price of homes typically dealt with. Take note of a Realtor's track record, because this can tip you off to superstar agents nearby and whether they're a fit for your needs.
Don't settle for ‘good enough'
According to the NAR, 52% of first-time buyers found their Realtor through a friend—and two-thirds contacted only one agent before moving forward. That's kind of like having your friends set you up on a blind date, then marrying that person by Date No. 2. (Hello, ugly future divorce!) After all, how can you be sure you made the right choice without looking around? Simple: You can't.
“One of the things I always tell my prospects is, ‘I'm flattered if I'm the only Realtor you are speaking to, but I think it's best if you speak with two or more so you can draw comparisons and make a powerful decision,'" says Brett West, an agent with McEnearney Associates. Trust us, there can be a huge difference between an agent who's “good enough" and one who's stellar—the difference between finding your dream home or not, and saving or wasting tens of thousands of dollars.
So the extra legwork you do now could really pay off in the (not so) long term. Be sure to explore at least a few options and grill them thoroughly before settling down with one (more on that next).
Ask all of these questions. This is no time for being shy:
How long have you been in real estate? You're looking for a seasoned agent—and while she doesn't need decades of experience under her belt, less than a year or two of experience can be concerning.
How long have you lived in this area? One noteworthy exception to the previous question is if she's lived in the area for a long time. “A newly licensed agent shouldn't be automatically removed from consideration," says Mindy Jensen, a Realtor with Equity Colorado Real Estate. “If they've lived in the area their entire life, they likely know more about it than an agent who has been in the business for years but only recently moved to the region." Weigh overall experience against local experience when making your decision.
Do you have a team, or do you work alone? Many standalone agents are excellent, but don't ignore the value of a team. “Working with a team is important," says Angelo Puma, a real estate agent in Keller, TX. “It increases response time and availability. Often, solo-run agents are double-booked when you need their attention, and you may lose that perfect property."
What is your schedule? If they're not a full-time agent, you need to know when they'll be available. “If the only time you can see houses is in direct conflict with times they have to be working their other jobs, you could miss out on a lot of properties," says Jensen.
Do you have any vacations planned? If they're heading out of the city anytime soon, make sure they have a back-up in case you find the perfect home while they're out of the country. “Murphy's Law rules Realtor vacations," says Jensen.
Found that special someone? It's time to move to the fun part: Shopping around and finding your fantasy, dream home—but in the real world.
Call me today, I can answer all these questions and any others you might have.
Knowing you want to buy a home is one thing; knowing what you canpay for is quite another. Too often, dreams and reality collide: You're yearning for a four-bedroom Colonial, but your wallet can handle only a two-bedroom bungalow.
So how do you filter the myriad options out there? Well, allow us to help you figure out how much home you can afford.
Consider your salary as a starting point
Getting a ballpark estimate of how much home you can afford boils down to how much money you're pulling in.
“The general rule of thumb is that you can purchase a home that costs two or three times your annual salary," says Harrine Freeman, a financial expert and the owner of H.E. Freeman Enterprises.
So if you're making $80,000 per year (and you have a reasonable amount of job security), that means you can afford a house up to three times that, or $240,000. That said, “this is only an estimate and does not account for your monthly bills," says Freeman. So let's dive into more specifics.
Follow the 28/36 rule
If you're overwhelmed by numbers, budgets, and big-ticket decisions, follow the28/36 rule, a simple but effective guide for affordability. The “28" refers to your monthly housing payments—things such as mortgage, insurance, and taxes—which shouldn't be more than 28% of your gross monthly income (ideally it should be less). This is easy to calculate, because all you need to do is multiply. For example, if your gross (meaning before taxes are taken out) monthly income is $6,000, multiply that by 28% (or 0.28) and that means you shouldn't pay more than $1,680 on your home.
The “36" refers to yourdebt-to-income ratio, which compares how much money you owe (to credit cards, colleges, car loans, and—hopefully soon—a home loan) to your income. This ratio should be “no more than 36%," says Freeman; ideally, it should be much less. Think about it in terms of your monthly expenses: If you make $6,000 per month but spend $500 paying off debts, you divide $500 by $6,000 to get a debt-to-income ratio of 8.3%. This is great, but adding $1,680 per month in mortgage payments would push up your monthly debt load to $2,180 and your debt-to-income ratio to 36%. This is exactly the maximum experts say you can afford. Going past this threshold is a risky move.
Once you know both these numbers, as well as how much of a down payment you plan to contribute, you can easily work out the maximum monthly mortgage payment you can afford—and by extension, the priciest house you should buy. According torealtor.com®'s Home Affordability Calculator, if you make $6,000 a month, pay $500 in debts (pre-house), and can make a down payment of $40,000, if you get a 30-year fixed mortgage at 4% interest you can afford a house worth $277,800. Plug in your own numbers and see what happens!
Apply for mortgage pre-approval
Another easy way to get a sense of how much home you can afford is to approach a lender and apply formortgage pre-approval: That's where they'll take a look at your financial past and present circumstances to determine how much money they're willing to loan you to buy a home. Added bonus: Mortgage pre-approval makes you a more attractive home buyer to sellers, since they know you've got financing to back up your offer.
Consider your dreamsandthe alternatives
Once you've determined how much you can spend, you can start weighing what you absolutelymust havein your home—and what you're willing to sacrifice if necessary. Use the “pick 2" rule: price, quality, location. Typically you can prioritize two of those categories, but not all three. Your best bet is to stick to an amazing neighborhood for an amazing low price, and know that your home might not have that pool, wine cellar, or other amenities you'd hoped for.
These trade-offs are just the reality of house hunting, so don't be disheartened. Consider widening your search to different neighborhoods or knocking a few items off your must-have list until you find the location and amenities that best fit your budget. Weigh what really matters for your dream home, then start performing preliminary searches online using sites such as realtor.com. And try to stay optimistic—with enough searching and some luck, you could find it all.
Once you've determined what kind of house you're looking for, it's time to put your feet to the pavement and start checking out the market in person. To do that, you'll need a Realtor®.
Scratching together a down payment is probably the most daunting hurdle to buying a home. Yeah, you already know that Rome wasn't built in a day. Well, the same holds true for building a down payment. It takes time!
Still, as long as you grease the gears early (likenow), you'll barely notice you're saving until—boom!—one day in the foreseeable future you'll be sitting on a pile of money that could pave the way to homeownership. Sound good? Good. Here's how to get started.
Trim those quiet, unnecessary expenses
OK, let's shift those preconceived notions. Contrary to popular belief, saving for a homeisn't mostly about grueling sacrifice—e.g., holing up in your apartment under a bare light bulb, eating ramen, and piggybacking off your neighbors' Wi-Fi.
“It's about a lifestyle change," says Travis Sickle, a financial adviser with Sickle Hunter Financial Advisors in Tampa, FL. A more sustainable strategy, he says, is to pinpoint your silent money siphons that you barely notice. Odds are you could try some of the following cost-cutting measures without feeling the pinch:
Replace your $250 monthly cable service with a $10 Netflix standard streaming account, and you'll save $2,880 per year.
Cut that languishing gym membership—at $50 per month, you'd save $600 a year. Go running instead!
Packing lunch will save you about $60 a month—or $720 a year.
Bike to work. For a 10-mile commute, biking can save you around $5 a day, according to Kiplinger—or $1,250 a year.
Start a coin jar. Saving all your loose change can have a big impact—up to $700, according to financial bloggerJ.D. Roth.
Turning down your thermostat just 3 degrees could shave almost 10% off your electrical bill, netting you $20 a month on a $200 bill, or $240 a year.
Curb those dinners and drinks out at restaurants, which can quickly add up. If you typically shell out $40 three times a week, reduce that to one evening a week, and you'll save $80—or $4,160 per year. (Bonus: It'll make those times youdoindulge more special!)
And if you and your significant other team up and try all of the above, that would amount to $10,550 per person, or $21,100 in one year's time. Just remember that when you're thinking of ordering a second glass of artisanal craft beer.
Open a dedicated account
If you don't have a savings account, now's the time to open one. A checking account is great for daily expenses, but when it comes to saving money—well, they don't call them savingsaccounts for nothing. You'll earn interest on your balance, plus there's a lot to be said for the mental benefit of having a specific place to stash your down payment. While interest rates haven't been very impressive in recent years (though, you'll be grateful for that when it comes time to get a mortgage), it's still great to have a dedicated account where you can see how you're progressing toward your goal.
Financial planner Bob Forrestof Mutual of Omaha points out that CDs and money market accounts offer higher gains than savings. You'll need a larger minimum balance than for a regular savings account, but your goal is to make it grow, not shrink, right? If you're using a CD, just make sure you don't withdraw the money before the time is up or else you'll face some stiff penalties.
Automate your savings
If you're struggling to put enough money away because of the constant temptations to blow your paycheck, consider automating the process. Ask your employer if you can have your paycheck deposited into multiple accounts—if so, instruct it to send a certain percentage of your salary directly into your savings account. Or go through your bank, setting up automatic withdrawals from your checking to savings account that will force you to keep spending in check.
Tap into your IRA
Another great place to stash your cash? A traditional or Roth IRA, says Forrest. In addition to being a tax-friendly retirement vehicle, it allows you to withdraw up to $10,000 for a home. While withdrawals from a traditional IRA will be taxed, a Roth IRA you've owned for more than five years won't be taxed at all, as long as you're a first-time home buyer. Just be careful with this method, though, as you will be denting your retirement funds. But combined with other savings, it can quickly add some heft to your growing nest egg.
Check out down payment assistance programs
Depending on the city and state you live in, you may be eligible fordown payment assistance programs, which provide money to help people buy a home. Most offer up to $15,000, typically in the form of a grant or low-interest loan. Most require your income to be below the area median. But even if you make more, do your research—there are programs that provide funds for higher-income households.
Once your down payment is on a roll, it's time to start looking for a home—and to do that, you'll need to determine exactly how much house you can afford.
It's easy to fall in love with the idea of buying a home. You've got it all planned out: a five-bedroom home in your favorite neighborhood with a manicured lawn and—why not?—a nice pool.
Well, if you really want to land that dream home, you'd better get started now!
Step 1 is to clean up your credit score, also called a FICO score—a simplified calculation of your history of paying back debts and making regular payments on loans. If you're borrowing money to buy a home (as most do), lenders want to know you'll pay them back in a timely manner, and a credit score is an easy estimate of those odds.
Here's your crash course on this all-important little number, and how to whip it into the best home-buying shape possible.
Pull your credit report
There are three major U.S. credit bureaus (Experian, Equifax, and TransUnion), and each releases its own credit scores and reports (a more detailed history that's used to determine your score). Their scores should be roughly equivalent, although they do pull from different sources. For example, Experian considers on-time rent payments while TransUnion has detailed information about previous employers.
To access these scores and reports, financial planner Bob Forrest of Mutual of Omaha recommends using AnnualCreditReport.com, where you can get a free copy of your report every 12 months from each credit-reporting company. It doesn't include your credit score, though—you'll have to go to each company for that, and pay a small fee.
Or check with your credit card company: Some, including Discover and Capital One, offer free access to scores and reports, says Michael Chadwick, owner of Chadwick Financial Advisors in Unionville, CT. Once you've got your report, thoroughly review it page by page, particularly the “adverse accounts" section that details late payments and other slip-ups.
Assess where you stand
It's simple: The better your credit history, the higher your score—and the better your opportunities for a home loan. The Federal Housing Administration requires a minimum credit score of 580 to permit a 3.5% down payment, and major lenders often require at least 620, if not more. So what can you do if your credit report is in less than shipshape? Don't panic, there are ways to clean it up.
Dispute any errors
A 2013 Federal Trade Commission study found that 5% of credit reports contain errors that can erroneously ding your score. So if you spot any, start by sending a dispute letter to the bureau, providing as much documentation as possible, per FTC guidelines. You'll also need to contact the organization that provided the bad intel, such as a bank or medical provider, and ask it to update the info with the bureau. This may take a while, and you may need documentation to make your case. But once the bad info is removed, you should see a bump in your score.
Erase one-time mistakes
So you've made a late payment or two—who hasn't? Call the company that registered the late payment and ask that it be removed from your record. “If you had an oopsy and missed just a payment or two, most companies will indeed tell their reporting division to remove this from your credit report," says Forrest. Granted, this won't work if you have a history of late payments, but for accidents and small errors, it's an easy boost for your score.
Increase your limits
One no-brainer way to increase your credit standing is to simply pay off your debt. Not an option right now? Here's a cool loophole: Ask your credit card companies to increase your credit limit instead. This improves your debt-to-credit ratio, which compares how much you owe to how much you can borrow.
“Having $1,000 of credit card debt is bad if you have a limit of $1,500. It isn't nearly as bad if your limit is $5,000," Forrest says. The simple math: Although you owe the same amount, you're using a much smaller percentage of your available credit, which shines well on your borrowing practices.
Pay on time
If you're often late with payments, now's the time to change. Commit to always paying your bills on time; consider signing up for automatic payments so it's guaranteed to get done.
Give yourself time
Unfortunately, negative items (such as those habitually late or nonexistent payments) can stay on your report for up to seven years. The good news? Changing your habits makes a big difference in the “payment history" segment of your report, which accounts for 35% of your score. That's why it's essential to start early so that you're sitting pretty once you're shopping for homes and find one that makes you swoon.
Once you've set your credit on a better path, it's time to tackle the next major hurdle: saving for a down payment.
While the commission can vary, it is typically 6% of a home's sale price—and that's usually shared with the buyer's agent. But what's implied by this question is "What are Realtors doing to earn that fat check?" Here are some facts to keep in mind: Unlike lawyers who get paid by the hour, or doctors who are paid by the appointment, listing agents don't get paid unless they make a sale. For every hour an agent spends with a client, he or she will typically spend nine hours on average working on that client's behalf doing everything from networking to finding potential buyers to filling out paperwork. And no, not all agents are created equal. Since most contracts last for a year, Realtor Susan Ratliffrecommends that sellers "interview three agents prior to selecting one to represent them. It's no different from choosing an attorney, accountant, or the doctor who will deliver your baby. You want to be sure that you trust that person and are comfortable with them."
"NO!" says Johnson. (Hey, no need to shout. We're right here!) "There is not any situation in which this is appropriate. Having the owner in the house makes the buyers uncomfortable. They feel as though they can't make comments or ask questions that could be offensive. The owner—who has a history and attachment to the house—has the tendency to argue if a potential buyer makes a comment that could be a little negative. This can turn off buyers and lose you offers." Got it.
On average, astaged home sells 88% faster—and for 20% more money—than a home that's left as is. The reason it works, of course, is it gives buyers a "stage" onto which they can play out their home-owning fantasies and envision themselves living in your home. "Choose neutral paint colors and remove any family photos," says Johnson. Give would-be homeowners a blank canvass that they can mentally fill with their loved ones and themselves.
Right now, nationally,houses spend around 100 days on the marketbefore they sell, although the time varies wildly based on area and price. So, price competitively and make sure that you and your Realtor are getting the place in front of as many eyeballs as possible. "The higher the exposure, the faster the offers," says Felise Eber, a real estate associate affiliated with Coldwell Banker Residential Real Estate and part of the Miami Beach luxury real estate sales team The Jills. Spread the word through your own social networks——real ones and virtual ones. You never know whose passing it along to that special someone will lead to a sale.
While themedian house price in 2016 is $228,000, the exact price of your own home will depend on its size, neighborhood, and lots of other factors. Further complicating matters is your own skewed perspective: We tend to mentally inflate our home's positives and airbrush out the flaws that are all too apparent to the cold, calculating eyes of buyers. "People always seem to compare their house to the most expensive sale in the neighborhood," says Mary Ann Grabel, an agent atDouglas Ellimanin Greenwich, CT. Instead, look at the prices of similarly sized homes that have recently sold in your area—data that agents call comparative market analysis, or "comps." Then, price your place strategically. "If you price too high, the home is likely to linger on the market," says Grabel. Meanwhile, pricing low can have major upsides, resulting in multiple bids that could ultimately jack up your price. So, do your homework. Then, discuss a number with your Realtor that feels right—and is realistic.
Selling a home you've lived in and loved over the years isn't exactly like unloading your collection of old Slayer LPs on Craigslist (or is it...?). It's hard. It's emotional. And above all else, it's complicated. A slew of questions will likely pop into your head throughout the process—and possibly keep you up at night.
Last week, we revealed the most common questions asked by home buyers. Since people on the other end of this deal have a lot on their minds, too, today we'll tackle the most common questions that real estate agents hear from sellers—along with some answers, of course.
Q: How much needs to be done to my house before putting it on the market?
"Many sellers have extreme anxiety over the thought of having to clear out and fix up their home, so much so that it can prevent them from putting the place on the market in the first place," says Alyssa Blevins with Pierce Murdock Group. But in most cases, there's no need to panic here—or to overshoot your goals. "Very often, there's far less to do than homeowners think." So before spending months and millions (figuratively) upgrading your place—or just throwing up your hands and giving up before you begin—show your home to a Realtor®. You might be pleasantly surprised by your current sales prospects.
Long before home buyers decide a certain place mustbe theirs, it behooves them to ask a lot of questions. For example: "How's the neighborhood?" or "Howoldis that water heater, anyway?" Ask away! Such queries help you pare down your options, so don't be bashful; real estate agents have heard them all.
However, the adage "There's no such thing as a stupid question" isn't always true. As proof, just check out this list of the strangest questions real estate agents have ever heard about a house. Cue the “Twilight Zone” music—things are about to get very,veryweird.
1. 'How do you keep alligators from coming up into the toilet?'
Michael Lyons, a real estate broker in Hollywood, FL, has certainly heard his share of concerns about alligators lurking in yards, ponds, and swimming pools. But sneaking into the house? Through atoilet? That left him stumped.
"I couldn't answer that question seriously," he said. "So I made up some weird solution. I told them, 'pour vinegar down the toilet once a month, they hate it.'"
This seemed to appease the buyers, who ended up purchasing the house. No word on whether or not the vinegar trick worked.
2. 'Do any swingers live in the neighborhood?'
While home buyers often have questions about the neighbors, this one was a first for Kate Julian, a real estate agent in Washington, DC.
"They said they were swingers and that's something they were looking for," she said.
Unsure what to say, she countered with, "drive around the neighborhood and see." After all, aren't swingers very friendly?
3. 'Does the car in the driveway come with the house?'
Chike Uzoka, a real estate agent in Newark, NJ, has heard of buyers asking whether many things "come with the house," from chandeliers and furniture to appliances and pool equipment. But a car?
The only way he could answer such a question was with sarcasm: “If the attorney doesn't catch it in attorney review, then yes it does!”
4. 'Is anyone buried in the backyard?'
Larry Prigal, a real estate agent in Gaithersburg, MD, had no reason to believe the house he was selling had any corpses stashed 6 feet under. "So I joked, 'I’m not aware of anyone buried here, but you can dig it up after you’ve settled on the property.'”
Who knows? Maybe the buyers were worried about our next point...
5. 'Are there any ghosts in the house?'
When Chris Dossman, a real estate agent in Indianapolis, holds open houses at older homes, it's not uncommon to hear creaks or creepy noises. That prompts a superstitious few to pop the ghost question.
"I usually respond jokingly at first that there are ghosts but that they're friendly, but then immediately follow with ‘just kidding,’ because people can be really weird about those things,” Dossman said. "Cellars and basements can be especially freaky, even to me."
6. 'I really like this house, but I need to pray about it. Is that OK?'
Kimberly Sands, a real estate broker in Wilmington, NC, said she gets this question (or some variation of it) a fair amount, so she wasn’t alarmed, at first.
“I thought the would-be buyer would go home and pray about it and then decide, so I said 'sure.'" That's when things gotweird.
"All of the sudden she drops to her knees and starts flailing her arms and yelling at the top of her lungs: ‘Dear Jesus, please send me a sign, Jesus, a sign that I should buy this house!’ Meanwhile, I slowly started inching toward the door planning a hasty escape. I ended up waiting outside on the curb for her to come out for about 15 minutes. When she came out, she was cool, composed, and had her answer: no."
7. 'Do you think the homeowner would give me the house without a down payment?'
Taken aback, Julie McDonough, a real estate agent in Southern California, told the buyer, "I can't imagine they would."
The buyer went on to explain that he'd taken a seminar on how to get the seller to deed the buyer the property without any credit or money.
"So I asked him, ‘How is that going? Has anyone deeded you a property yet?’" McDonough recalled. "He said, ‘No, but it's a numbers game.’"
8. 'Can I come back at midnight to see how the moon here affects my soul?'
The question threw Pate Stevensfor a loop, but then he figured there was no harm.
"Although a strange request, I drove over to the home at midnight to let him in,” said Stevens.
The outcome? “He didn’t buy the house because the moon ‘didn’t feel right’ to him.”
9. 'Why is the garage unfurnished?'
Um. "Because the sellers use it for their cars, not as a living space," repliedBenny Kang, a real estate agent in Irvine, CA, to which the buyer said, "Oh, you're right."
"When I heard that question, I thought, 'This is going to be a long tour,'" Kang said.
10. 'Can we close all the blinds and doors and turn off the lights? I just need to see the space at its darkest.'
“I was pretty sure this was the end for me," said a Brooklyn real estate agent who was holding an open house. "After I said OK, I stood by the front door with my hand on the doorknob.”
Fortunately, the agent, who asked not to be identified, made it out unscathed. “[The buyer] was this eccentric guy who I later found out was the CEO of a big startup.”
While buyers can always back out of a deal, doing so without good reason may forfeit theirearnest money (the cash put down to secure the offer) But there are some ways to walk with your earnest money in hand.
Contingencies are great loopholes. For example, upon an unsatisfactory home inspection, the buyer can ask for their deposit back. Another loophole is 'subject to appraisal". That means you can back out if the lender for your loan doesn't think the property is worth what you offered.
Home buyers aren't the only ones with questions; home sellers have plenty on their minds, too. Find out what they're wondering in a new articles next week!
Sometimes buyers question whether a home inspection is really necessary. I say, "Absolutely YES!!!" A home inspector takes a weight off of your shoulders by looking into the condition of the roof, electricity, heating and air, plumbing, Ensuring these things work properly prevents you from paying to fix them in the future. If some things are not up to par, you can negotiate with the seller to get those fixed before you sign the paperwork. I highly recommend every client I have to get a home inspection done.
Typically the average escrow period is 30 - 45 day, however, again there are lots of factors that can shorten or lengthen this process, such as: buyers due diligence; home inpsection issues, appraisals, underwriting, etc. I will say one thing that can be quite helpful. Work with a Lender your Realtor has dealt with before and has a good relationship with. This can often make the process go much smoother. There is nothing worse than your Realtor working to get you closed on your new home and they can't get your Lender to communicate on a timely basis.
Having me do a comparable market analysis CMA on properties in the neighborhood is the first step. I will take factors such as style, square footage, bedrooms, baths, lot size and condition of the prospective home and compare to like properties that have SOLD in the past 6 - 12 months. A Realtor who knows the Northern Kentucky market is extremely beneficial to a home buyer.
Q: What do you think the seller will accept as a fair price?
Again, there are a lot of factors involved here. First of all, we don't ever really know how low a seller will go on the final sale price. If the property just came on the market, the seller may not be willing to come off the list price too drastically. If the property has been on the market for quite some time, the seller may be willing to look at a lower price than when originally listed. Keep in mind, that when we are in a hot sellers market such as we are right now, homes are generally not on the market but a few days or weeks. When one of my buyers is ready to write an offer on a home, I do a market analysis of the area to see what other properties have SOLD for recently to help my clients come up with a reasonable offer.