The Realty Advantage

Here’s a great story about Advantage Realty in the Tuscaloosa News from the July 4th edition.  This is just the front page; we’ll have more of the story coming soon!

Since the first quarter of this year, the real estate market in Tuscaloosa has seen a dramatic increase in activity — especially in demand for property which, thankfully for those trying to sell, is being reflected in sales.

Right now, condos, student housing, and houses (especially north of the river) are all in very high demand, selling quickly because of it, and selling at — and sometimes above — asking price.  In most cases, if you’re property is priced right, it will sell in most areas of town.

After 4 challenging years in the real estate market, this is very heartening to see for our area and for the increase in consumer confidence it indicates.

All of this to say: If you’re thinking of buying or listing at this time, it is more important than ever to talk to one of our agents.  It is essential given how volatile the market has been that you fully understand the market and all of its moving parts before making a decision on a purchase or a listing price.  Right now is a great opportunity for those looking into the real estate market but it is an opportunity that should to be handled correctly.

“What are the best paint colors for selling a home?”  This question gets asked a lot.  It’s a great question to ask because it really does matter.  And it matters for the same reason furnished homes sell better than empty ones: because buyers have to be able to imagine themselves and their belongings in the home.  Most people simply can’t imagine their stuff in a chartreuse house or a black kitchen.

This might hint at something that is going to be true pretty much across the board — neutral colors, trending towards lighter colors, will always be recommended from bathroom to bedroom.  This link is for a slideshow of the best-selling paint colors and some general thoughts and advice on each:

http://bit.ly/mEowzl

Notice anything?  They are almost all white — or close to it.  The black is for trim.

This is not to say that buyers want a clinical setting.  People actually do respond more positively to a “white” with more yellow in it.  This makes the room warmer.  And a kitchen needs to be bright — pastels and bright colors in the kitchen remind people of the happiness, warmth, and togetherness we associate with eating meals together.

There are more specific guidelines: earth tones are great for a wooded lot or a more rural setting, etc.  But, really, all of this comes down to good judgment.  A blank canvas is always white or off-white.  An artist wants to imagine what he can create.

Your home is more than brick and mortar. I have seen this through my own eyes every minute since the tornado took something from everybody that lives in Tuscaloosa. I have walked through destroyed neighborhoods where my company has sold homes for years to families who had dreams nothing could touch. My first thought was: What could I have done differently for them? And how could I stop the pain for people I consider family everywhere I look? The only answer for me — and most everyone else — is to love one another and help your neighbor get through each day.

As the hours passed, it did not take long for me to realize why I do my job and love what I do. Many people may be without a place to live, but they know they have a home in Tuscaloosa.

My prayers and thoughts go out to everyone in Tuscaloosa and any area touched by this enormous tragedy.

Rather than add a #4 to the list of confusing or unexpected real estate terms, I decided that this post would be a classic blog post: an opinion on something I’d been thinking about.

Basically, I’m still thinking about how to help our clients and new home buyers make the most of their experiences and I realized that many have a misconception about loans.

The first?  ”Getting a loan comes after finding the property we want.”

This idea has these two steps reversed for a couple reasons:

1. Being pre-approved for a loan allows you to know your exact price range. This helps planning and saving.
2. It is also very helpful in narrowing your search for a home drastically, saving you time and the frustration in being unable to afford the home you settled on.
3. Your relationship with the seller is a much more serious one with a pre-approved loan.  They know you are serious and because you can buy immediately you have that much more bargaining power.

In the last post I mentioned (maybe somewhat ominously) that there are some unexpected fees that go along with purchasing a home.  Well, here’s another one:

Title Insurance

Title Insurance is to a certain extent self-explanatory but the reasons behind it are probably not.  This is confusing to most home owners because it is counter-intuitive that once you buy a home someone can, sometime in the future, make a claim to ownership.  This does happen and can be troublesome for a lot of reasons.

The reason it is even possible is that, while the organization supervising the closing will investigate the house’s ownership through local records, this does not guarantee that these records are complete or correct.

If they’re not, and someone challenges for ownership later, this insurance — which most lenders do require to approve the loan — will be much appreciated.

Not only will the insurer pay off the loan if that becomes a necessity but they will defend you in court as well.  A loss is not good for you (you don’t have to pay legal fees or a settlement but you will probably have to move) or them.

The amount of money you are typically insured for is the amount of the loan.  This is why the lenders require the insurance and they will be getting that money.  However, you can buy additional coverage for the money you put into the house as well and, if so inclined, you can add additional coverage to cover inflation.

These events are less common than you’d think and nothing to worry about now.  But it is always nice to know why we are paying fees and insurances we didn’t request.

If you are going to put 20% down on your first home, this post isn’t for you.  So, since that leaves most all of you, here we go…

PMI

It’s Private Mortgage Insurance and if you’re buying a home you’re probably going to be paying it.  And you probably don’t even know it yet.

Basically, PMI is insurance for your lender and the only way that people can now buy homes at 5 or 10%.  It is an extra fee worked into the payments and, for the most part, it is a necessary part of home buying.

But, there are a couple things to remember about PMI:

1. It’s not that expensive.  No one wants to see an extra charge when they’re already taking the financial leap of buying a house.  But, the price of the PMI will not be the make or break in your ability to buy a home.
2. Some lenders do not require it.  If it really is a major sticking point for you, shopping around for loans is certainly an option.
3. Conventional loans will oftentimes eliminate the PMI once you have 20% equity in your home. For most, this will take a significant amount of time.  But at least you won’t be paying that fee forever.
4. Even if your loan doesn’t automatically eliminate the PMI at 20% you have the right to demand immediate cancellation of the fee at 22% equity. (You may request cancellation once you hit 20%.)

So, there are the basics of an issue most homebuyers have to deal with but don’t know about until they’re asked to pay the fee.  As always, feel free to seek advice on the best options from your realtor.  We are happy to help and, if we can’t, can always help you find someone who can.