Monthly Archives: July 2015

Selling Your Home? How to get ready to sell with less stress

I hear it all the time. When selling your home has become the plan, the first emotion is usually panic. What do we need to do to get ready to sell….and mostly….how are we going to get rid of all of our stuff.

Late Comedian George Carlin had a routine in the 70’s about how we accumulate so much stuff and then we need a bigger place to store the stuff. We are all guilty and frankly for some people it is even more difficult to part with things. But when selling a home, clutter means no sale or less sale, so it must be done.

It’s true, the range of buyer emotions when faced with too much clutter in a home is multi-faceted. Some buyers see the clutter in the home, closets, garage, basement, etc. and perceive that there is no storage in the home. Some buyers even express concern as to if the seller is going to be able to get everything out and if they will leave things behind. Some clutter adds too much personality of the seller into the home, like collections and themed possessions so the buyer has a difficult time separating the seller from the home and picturing themselves living there. But the majority of the damage clutter does is it make the home seem small and that means no sale or less price to the seller.

Selling a home, you must show the house in its best appearance possible. Remember, when you are selling a home, you need to present the fantasy of living there for the buyer. Tons of floor space, tons of closet space and storage. To parallel with retail, you would never see a storefront display or a Macy’s picture window that shows someone surrounded by magazines, newspapers, too many books, too many small appliances….and the list goes on. When selling your home, you must put your best foot forward.

Most sellers know this on some level, but the mammoth task ahead is just too much. When you learned to walk, you took one step at a time. And so does this. Here are a few steps and a plan that makes this easy. One step, then another and soon you are done. And you DO NEED to do all of this before you go on the market. First impressions are nearly impossible to undo. Make the right impression with buyers the first time.

Step 1 – Identify the problem areas…Your closets, your basement, your garage, your rooms. Go through each room with a very critical and keen eye and identify the things that are cluttering up your home. I tell my sellers to get rid of 20-30% of what is in all these areas. If you can’t do this yourself, ask your Realtor, friend or family member to help you with fresh eyes. BUT…remember. You need to hear their comments. If they think it, a buyer will too.

Step 2 – Formulate a plan. You need to figure out how you are going to get things out and where you are going to put them. You can hire stay at home moms, college kids, and high school kids in your area to help with odd tasks and heavy lifting, or get family and friends to help, but you do need to be a part of the equation. You need to have a measure for everything you look at like…if I haven’t worn or used it in a year, then it goes. Or two years, etc. You need to be brutual with yourself – why am I keeping this? Why do I need or want this? Remember, you have to pack it, store it, unpack it and pay for someone to move it. The last thing you want is to get into your new place and not have room for something or not want it anymore. Make that decision now. Once you make the hard decisions the first time, the next time it gets easier.

Step 3 – Where will it all go? This doesn’t have to be done in days or a weekend – you can do it in stages. I encourage you to put yourself on some charity routes. Give yourself 2-4 weeks. Stick with a schedule. Each few days or week have a different charity come to your house and give them something. You will be motivated to have something ready for them and it will keep you on schedule. Multiple Sclerosis, Epilepsy, Amvets, Vietnam Vets, Salvation Army… the list goes on. Most have websites and you can even schedule pickups on the website and they will tell you what they accept. Usually clothes, household goods, etc. Or just make a few trips to your local Goodwill. I like the pick ups because it forces you to stick to a schedule.

You can, of course, store the items in a Pod or storage unit. Remember, storage units cost money and you really need to decide if your things are worth it. Pod is part of your moving, but don’t store the pod at your home, either pay them to store it or put it elsewhere. It will not look good to buyers to have that in the drive. Too Distracting.

Someone once said that the best way to tackle a big project is just whittle away at it one step at a time…soon you will find you are done.

Rehab 203k loans – do they really exist?

Rehab loans exist mostly via the FHA 203k route which allow buyers to loan beyond the amount of the purchase price to either cosmetically rehab homes or do repairs that allow the home to pass FHA guidelines.

Yes, they do exist and recently more lenders are starting to carry streamline FHA 203k Rehabilitation loans to allow borrowers to loan up to $35k beyond the sales price of the home to pay for rehab work.

So, the pink or 70’s shag carpeting can be replaced, the wallpaper or white or bright walls can be repainted, cabinets updated, new tile or hardwood, granite counters installed, stainless appliances purchased, etc. And all can be done at a fraction of the immediate cost through FHA 203k Rehabilitation loans, basically $50 extra per month for every $10k. Yes, it will cost more over 30 years, but less than credit card interest rates and it will happen a lot faster and easier than if you were to save for it and wait and then live in a construction zone. And you will get a deal on a gem of an outdated house.

FHA 203k Rehabilitation loans are a great way to get immediate gratification on that home that ticks all boxes except is not updated and offers buyers a great way to get a good deal on a diamond in the rough.

These FHA 203k Rehabilitation loans; however, are considered high risk by the lenders, and if you think you have to jump through hoops with lenders on a regular deal – double the amount of time, hassle and hoops and that is what to expect.

You have to get a general contractor with experience and who is willing to do a FHA 203k Rehabilitation loans. Although you can get some things done yourself that require no skill and is allowed by the lender and their inspection liasion. Permits need to be filled out and all village codes obeyed and inspected.

You will need to get a contractor right away and they need to be willing to complete forms and comply with all the lender wishes on forms. Usually only 2 draws are allowed – 50% at closing and 50% after completion. Some contractors will not like that. Everyone needs to be licensed for work and everything has to be accounted. You can hire any contractor you want, but they need insurance and licensing, so Uncle George is not likely going to be able to do the job. They can have subcontractors who are licensed.

You usually have 30-60 days to complete the work after closing and then you can move in. You will not be able to live there during the work, that is important to note. Then the lender liaison will approve the work and you move in…. happily ever after.

However, FHA 203k Rehabilitation loans can be tricky for major repairs. Again, high risk becomes higher risk and lenders usually make it very difficult to get this done. Mold or standing water, structural repairs, electrical and sometimes plumbing repairs, or moving or tearing down walls, etc. are very difficult to get approved under this type of loan. Again, lenders try to reduce or eliminate high risks when making loans with the buyer and/or the property. For these kinds of repairs, lenders may require testing or additional inspections and definitely longer review times. This may make foreclosure sellers difficult to get additional time, etc.

FHA 203k Rehabilitation loans ARE possible, but here are a few things you need to know…

Expect at least 60-90 days to close – again, could cause problems with seller, so be prepared and don’t forget the time to close.
You can’t move walls or include pools, furniture, etc. in the streamline loan. There is another type but major reconstruction is really not advisable with a loan.
There are extra fees for the liaison/inspectors the bank will require.
You will start paying the mortgage the month after the closing, so you may start paying even more you move in.
Contractors will delay you. Some contractors don’t like this type of work because of the rules, paperwork and the strict payment and deadline terms. You need to get your contractor bid in before anything can happen, so get everything as fast as possible.
Make sure you get a lender who processed their own loans and can control the process. Lenders who farm this out lose control of the situation and add extra time.
BE patient. The process is very difficult and can be done, but it will be tedious and sometimes not make sense. Remember whoever has the purse pulls the strings and lenders need to ensure the home is worth the extra work.