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5 Steps to Deciding How Much to Offer – or Ask – for Your Home

by Nuvia Rivera & Associates

One of the hardest, most important decisions homebuyers face is how much to offer for their home. And the glut of information on the web about real estate only makes buyers even crazier than the decision itself does. Supply, demand, foreclosure rates, mortgage rates – buyers think they need to run spreadsheets and do fancy math to make a smart offer. And THATcan be super intimidating.

But the fact is, there is a pretty short list of steps you need to take to make a smart offer – one that gets you a great value, but is also likely to be successful at getting the property. (A low offer does not make for a great deal if you don’t get the house!) And most of the same steps apply to sellers trying to set the list price that will lure the most buyers (and net them the most cash)!

Step 1: What do the “comps” say? First things first. When it comes to pricing a home, or making an offer to buy one, the ‘first thing” is the home’s fair market value. Both buyers and sellers should work with an experienced, local agent to understand what the home’s value is. Most agents will do this by offering you a look back at similar properties that have recently sold in the neighborhood – i.e., the comparable sales, or comps.

HINT: You can also find comps for a home listed on Trulia by scrolling down to the section labeled Sold Homes near 1234 Merriweather Lane on the property's Trulia listing page.

Ideally, look for comparables that are very recent sales (3 months or less before you’re listing or buying), very similar properties (i.e., same number of bedrooms, bathrooms, square footage; and similar style, condition and amenities). If you do get into contract, these may be the same comparables which will be considered by the appraiser, so looking at them before making an offer can:

(a) provide factual support for a lower-than-asking offer or for the asking price, in a negotiation, and

(b) result in a sale price at which the property will actually appraise, later on - avoiding the common glitch of the deal falling through because the appraisal comes in way below the agreed-upon price.

Also, looking at comps is the first step for locating a home’s seller and prospective buyer in the reality-based universe of current home values. The fact that you bought or refinanced the place at a given value 5 or 6 years ago is entirely irrelevant to what it’s worth today, as is the buyer’s belief that the place was worth $100K less at the trough of the market, in 2009.

Step 2: What can you afford? This step is much more critical for buyers than for sellers. (Unfortunately, sellers, the facts that you need to net a particular amount to buy your next home or pay your existing mortgages or credit card bills off has no relationship whatsoever to the price at which you should list or will sell your home.)

Buyers – it’s a must to make sure that your offer price for any given home falls within the range of what is affordable for you. This includes offering a price within the range for which your mortgage was preapproved, but also includes making sure that the monthly payment and cash you’ll need to close the deal (down payment + closing costs) are affordable in light of the particular house. If, for example, the property will require repairs for which you’ll need to conserve cash, or has HOA dues you hadn’t planned on, you may need to rejigger your offer accordingly.

Step 3: What’s your competition? (And what’s theirs?) This is another step at which it’s critical to check in with your agent. You need to know what level of competition you’ll face – whether you are a buyer, or a seller. As a seller, you can find this out by looking at things like how many comparable homes are listed in your town or your neighborhood in your general price range (your agent will brief you on this). Sellers should also consider what type of transactions their home will be up against – the more distressed properties (foreclosed homes and short sales) with which your home must compete, the more aggressive you must be with your pricing to get your home sold.

The more competition you have, as a seller, the lower you should tweak your list price to attract buyers to come see your home. (And the more buyers come to see your home, the more likely you are to get an offer!)

Buyers should also be cognizant of the competition level they will face for homes. Believe it or not, even on today’s market there are properties and neighborhoods in which multiple offers are the name of the game. Work with your agent to understand the list price-to-sale price (LP:SP) ratio , which lets you know how much under or over the asking price properties are selling for in your target home’s neighborhood; the higher the LP:SP ratio, generally speaking, the less competition there is among buyers.

Your agent can also brief you on:

(1) (1) The number of offers – if any - that have been presented on “your” property (which the listing agent will usually, gladly tell). If there are other offers, you’ll want to make a higher offer to compete successfully against them; and

(2) (2) The number of days the home has been on the market, relative to how long an average home stays on the market before it sells – the longer it has, the more pressure is on the seller, price-wise, and the less competition the buyer is likely to have. (One exception is the sweet spot scenario, when a property that has been on the market for a long time has a price reduction and gets a bunch of offers as a result! )

4. How much do they need to sell (or buy) it? Buyers: Has the listing in which you’re interested been reduced at all? By how much? Has the listing agent informed you that her clients are highly motivated, flexible or have an urgent need to sell?

Sellers – most buyers are not in a high state of urgency to buy these days, given the long-term, high affordability of homes and interest rates, except when they have an urgent personal reason for moving, e.g., buyers who are relocating for work. Of course, all of real estate is hyperlocal, so it’s important to understand how motivated buyers are in your local market, generally speaking, before you set your list price.

Trulia’s new, interactive Trulia's Price Reductions MapPrice Reductions Map offers a number of clues to critical indicators of buyer and seller motivations in your home’s town and zip code, in just a click on the map - including:

· how many homes in your target property’s area have had at least one price reduction,

· how likely a home in the area is to have multiple price reductions.

The higher these numbers are, the stronger of a buyer’s market it is, and the more bargaining power buyers likely have. And if you’re the seller, the higher these numbers are for your area, the lower you may need to price your home to be successful at getting it sold.

5. How much do you want to buy, or sell, the place? Step #4 was about taking the motivations of the folks on the other side of the bargaining table into account when formulating your offer and your list price. This step is all about you – what’s your level of motivation? Now, buyers, you certainly shouldn’t offer a price way above what the place is worth (see Step #1) just because you really, really want it, unless you have the cash to throw around. But within the range of the home’s fair market value, it may make sense to move higher within that range if you are highly motivated to get that particular property.

Sellers: think of your list price as the most powerful marketing tool at your disposal. if you really want or need to sell, get aggressive about setting your price as low as makes sense for your your home's value and local market dynamics to attract qualified buyers and help your home stand out against all the competition.

Adding a room to your home, or remodeling an existing kitchen or bath, can be an exciting and rewarding experience. But selecting a contractor to do the work can be confusing at best.

"Your best bet is a personal recommendation," says Barbara Kavovich, who owns and manages one of the largest female-owned construction and renovation companies in New York City. "A satisfied customer can be your greatest resource in determining a contractor's skill and business ethics."

Barring that, she adds, there are questions to ask that will help you figure out whose hands you want to put your project in. Listed below are seven things Kavovich claims a contractor will never tell you-things you want to check out and check off your list before you sign on the dotted line:

1. "I'll probably go over budget." -Make sure your contract spells out start and end times, estimated costs of equipment and materials, and details on cleanup, supervision, rubbish removal and insurance coverage.

2. "I botched a few jobs." -Call the Better Business Bureau or the Department of Consumer Affairs to find out if complaints have been lodged against a contractor. Call his references, but better yet, visit a few sites where the contractor has worked.

3. "You won't be able to find me." -Your contractor may not be onsite every day, but you should know who is in charge when he is elsewhere, and how you may reach him if you need to.

4. "Don't pay me if you don't like it." -Contractors deserve to get paid for their work, but your contract should include language that allows you withhold money for work that is incomplete, incorrect or poorly done.

5. "I don't have adequate insurance." -Make sure your contractor has in-force Workmen's Compensation and general liability insurance. Otherwise, you may be liable for the cost of certain mishaps, or if one of his workers is injured while working on your property.

What Can Your Lawn Do for You?

by Nuvia Rivera

Homeowners all over the country take great pride in their lawns. But a lush, green lawn can do more than boost egos. A healthy lawn can reduce allergens and dust, increase the value of a home, and reduce erosion and runoff.

Reducing allergies to ragweed pollen

Of all Americans who are allergic to pollen-producing plants, 75 percent are allergic to ragweed pollen. While a single ragweed plant may only live for one season, it produces up to one billion pollen grains during that time. A well-maintained lawn can help limit the amount of ragweed pollen in the air, as it is typically free of many pollen-producing plants and other problem plants, such as poison ivy, poison oak and poison sumac. More than one half of the U.S. population is allergic to these noxious weeds.

Landscaped lawns boost your real estate value

Nothing beats a first impression. When prospective buyers are searching for a new home, well-landscaped lawns and nearby parks are important factors. A study conducted by Virginia Tech University estimated that attractive landscaping can increase the value of a home anywhere from 5 to 11 percent, depending on location. It was also reported that landscape investments are recovered fully, and sometimes doubled by the increased home values.

"Potential buyers can be immediately swayed by an unsightly yard, leaving them to wonder if the lack of care and attention to the lawn has been carried to the inside of the house," says Gray Mattern, Realtor in St. Petersburg, Fla. "If the buyer doesn't get past the negative first impression, he or she may decide to bypass the home completely without looking at the interior. In this buyer's market, it's important to appeal to a wide range of prospective buyers."

A healthy lawn reduces dust and soil erosion

Healthy grass holds soil in place and prevents runoff from being washed into lakes, rivers and streams. The University of Minnesota released results of a research study showing a lawn that is not fertilized actually has more runoff than a lawn that is properly fertilized, due to the increased health of the grass.

"Proper lawn care practices will be rewarded by an aesthetically pleasing property and will result in a variety of environmental benefits," explains Dr. Cathie Lavis, horticulture professor, Kansas State University, Manhattan, Kan. "A key factor to success is selecting the right grass variety for both your region and particular site conditions."

How to maintain a healthy lawn

"Lawn maintenance includes timely mowing and watering. Additionally, grass quality is generally measured in terms of color, density and uniformity," says Lavis. "Scheduled fertilization and an awareness of pests and their control will contribute to lawn quality."

Two elements of good lawn health are proper pesticide use when necessary and proper fertilizer use to ensure the grass has the nutrients it needs to thrive. A properly fertilized, healthy lawn helps prevent weeds, while pesticides control weed populations already present or before they emerge. Proper pesticide use also keeps grubs and insects at bay.

The key differences between lawn and garden pesticides and fertilizers are:

A pesticide is the generic term for insecticides, herbicides and fungicides. Pesticides are meant to kill or control weeds, harmful insects and fungal and other diseases. The benefit of pesticides is their ability to prevent and stop pest problems-weed, insect, or disease-before they become out of control and threaten the health of your lawn.

Fertilizers provide the proper nutrients to your grass, plants and trees, enabling them to thrive. A fertilization program should include fertilizers that are formulated to meet the needs of your lawn.

Lawn and Garden Tips for Homeowners

When selecting and using pesticides and fertilizers, the product directions must be followed to make sure the product works properly and is used in a safe and environmentally sound way. Product labels specify the amount of product that should be applied, how much is needed for your treatment conditions, and how to safely apply and store products.

Ask yourself the following questions before choosing the right lawn and garden products to meet your needs:

What insect, weed or other pest are you trying to control? What is the problem with your lawn? The label will tell you which product best fits the needs of your lawn and where it can be used.

How big is your lawn? What treatment are you applying? Select the product that meets the needs of your lawn, and buy only what you need.

Do you need a spreader to apply the product? If you have a small, localized problem consider a ready-to-use spot treatment. Follow product label directions for spreader and spot applications. More is not better; read the label and apply only the recommended amount.

To get more information on the benefits of a healthy lawn, visit www.debugthemyths.com.

Homeowners all over the country take great pride in their lawns. But a lush, green lawn can do more than boost egos. A healthy lawn can reduce allergens and dust, increase the value of a home, and reduce erosion and runoff.

Reducing allergies to ragweed pollen

Of all Americans who are allergic to pollen-producing plants, 75 percent are allergic to ragweed pollen. While a single ragweed plant may only live for one season, it produces up to one billion pollen grains during that time. A well-maintained lawn can help limit the amount of ragweed pollen in the air, as it is typically free of many pollen-producing plants and other problem plants, such as poison ivy, poison oak and poison sumac. More than one half of the U.S. population is allergic to these noxious weeds.

Landscaped lawns boost your real estate value

Nothing beats a first impression. When prospective buyers are searching for a new home, well-landscaped lawns and nearby parks are important factors. A study conducted by Virginia Tech University estimated that attractive landscaping can increase the value of a home anywhere from 5 to 11 percent, depending on location. It was also reported that landscape investments are recovered fully, and sometimes doubled by the increased home values.

"Potential buyers can be immediately swayed by an unsightly yard, leaving them to wonder if the lack of care and attention to the lawn has been carried to the inside of the house," says Gray Mattern, Realtor in St. Petersburg, Fla. "If the buyer doesn't get past the negative first impression, he or she may decide to bypass the home completely without looking at the interior. In this buyer's market, it's important to appeal to a wide range of prospective buyers."

A healthy lawn reduces dust and soil erosion

Healthy grass holds soil in place and prevents runoff from being washed into lakes, rivers and streams. The University of Minnesota released results of a research study showing a lawn that is not fertilized actually has more runoff than a lawn that is properly fertilized, due to the increased health of the grass.

"Proper lawn care practices will be rewarded by an aesthetically pleasing property and will result in a variety of environmental benefits," explains Dr. Cathie Lavis, horticulture professor, Kansas State University, Manhattan, Kan. "A key factor to success is selecting the right grass variety for both your region and particular site conditions."

How to maintain a healthy lawn

"Lawn maintenance includes timely mowing and watering. Additionally, grass quality is generally measured in terms of color, density and uniformity," says Lavis. "Scheduled fertilization and an awareness of pests and their control will contribute to lawn quality."

Two elements of good lawn health are proper pesticide use when necessary and proper fertilizer use to ensure the grass has the nutrients it needs to thrive. A properly fertilized, healthy lawn helps prevent weeds, while pesticides control weed populations already present or before they emerge. Proper pesticide use also keeps grubs and insects at bay.

The key differences between lawn and garden pesticides and fertilizers are:

A pesticide is the generic term for insecticides, herbicides and fungicides. Pesticides are meant to kill or control weeds, harmful insects and fungal and other diseases. The benefit of pesticides is their ability to prevent and stop pest problems-weed, insect, or disease-before they become out of control and threaten the health of your lawn.

Fertilizers provide the proper nutrients to your grass, plants and trees, enabling them to thrive. A fertilization program should include fertilizers that are formulated to meet the needs of your lawn.

Lawn and Garden Tips for Homeowners

When selecting and using pesticides and fertilizers, the product directions must be followed to make sure the product works properly and is used in a safe and environmentally sound way. Product labels specify the amount of product that should be applied, how much is needed for your treatment conditions, and how to safely apply and store products.

Ask yourself the following questions before choosing the right lawn and garden products to meet your needs:

What insect, weed or other pest are you trying to control? What is the problem with your lawn? The label will tell you which product best fits the needs of your lawn and where it can be used.

How big is your lawn? What treatment are you applying? Select the product that meets the needs of your lawn, and buy only what you need.

Do you need a spreader to apply the product? If you have a small, localized problem consider a ready-to-use spot treatment. Follow product label directions for spreader and spot applications. More is not better; read the label and apply only the recommended amount.

To get more information on the benefits of a healthy lawn, visit www.debugthemyths.com.

This Weeks Odd News Videos

by Nuvia Rivera

Realty Check Video: Foreclosures

by Nuvia Rivera

Debt Ceiling and Housing Video

by Nuvia Rivera

10 Tips for a Stress-Free Move

by Nuvia Rivera

Whether you are moving across country or just 10 blocks away, there is a certain amount of built-in uncertainty that cannot be avoided as you are getting ready to pack your belongings in preparation for moving day. But planning ahead and working from a checklist can do wonders to help your peace of mind as you get closer to the day of your big move.

From the experts at Mayflower Moving and Storage, here are ten tips for making your next move as smooth and stress-free as possible:

Pack heavy, pack light Pack heavy items such as books and dishes in small, compact cartons and pack light items such as pillows and towels in large cartons.

Get the bed ready Pack the bed linens you will need for your first night in your new home in one or two drawers of a dresser. This will make it easy to find when you need them.

Prep the fridge After you've emptied and cleaned the refrigerator, put a handful of baking soda or charcoal in a sock and place it inside the fridge to keep it smelling fresh.

Keep the phone book It may come in handy if you need to make calls to your old region from your new one.

Tag cartons clearly Mark each with its destination, such as kitchen, den or master bedroom.

Protect your memories - If it's irreplaceable, take it with you in the car. Otherwise, pack framed photos or art by placing sheets or blankets between them for protection.

Pack and clearly mark a 'necessities' box This should contain things like toilet paper, soap, a flashlight, a screwdriver, your personal address book and a few utensils and paper goods that you can identify easily in your new home.

Unscrew the bulbs Removing the bulbs from lamps will help reduce the incidence of broken glass.

Be nice to plants If moving plants in your car, don't let the leaves rest against the window or they will scorch.

Keep numbers handy Keep the number of your moving company and the cell phone number of the van driver in your purse or pocket and be sure they have yours.

Q: What are conventional loan limits?

by Nuvia Rivera

Q: What are conventional loan limits?

A: These are limits imposed by Fannie Mae and Freddie Mac on the amount of money you can borrow to finance a home purchase. The loan limit generally increases each year and applies to single-family homes in the 48 contiguous states, with higher limits in Alaska, Hawaii, Guam and the U.S. Virgin Islands and on homes with two, three and four units.

For example, in 2008, the loan limit is $417,000 for a single-family owner-occupied property, $533,850 for a two-unit property, $645,300 for three-units, and $801,950 for four-units.

Theoretically, no limit applies to the amount a lender can provide under the VA program. But in practice, local lenders generally lend up to $417,000 in 2008 with no money down.

There are also loan limits for owner-occupied homes under the FHA 203(b) program, the most common FHA option. The limits vary depending on whether you live in a "high cost" or "low cost" area, as well as the number of units that are being financed. In general, the FHA loan limit is $362,790 for a single-family home in high-cost areas and $200,160 in low-cost areas.

Creating an Eco Friendly Home Video

by Nuvia Rivera

Remodeling Tips to Incorporate "Green" Design into Your Home

by Nuvia Rivera

In celebration of Earth Day on April 22, Case Design/Remodeling, Inc., a leading D.C. Metro area home improvement company, offers homeowners six tips for incorporating "green" design into their next remodeling project. The list was compiled by Matt Dirksen, a Green Advantage Certified (GAC) project designer at Case with more than 15 years of experience in the home remodeling industry.

Below are Case's top six green home design and remodeling tips for Earth Day 2011.

Preparation Before beginning a project, perform an "existing analysis" of the home. This includes anything from gathering information on water, gas and electricity usage, to conducting an energy "audit" to pin-point daily habits such as leaving lights on when a room is not in use.

Lighting Replace incandescent bulbs with energy-efficient LED or compact fluorescent (CFL) lighting. If possible, take advantage of both natural lighting and shading to reduce energy consumption from heating and cooling a home.

Materials Opt for paints and finishes with low or zero-volatile organic compounds (VOCs), which are harmful to the environment and one's health. Choose designs that incorporate recycled materials, such as countertops made from recycled glass, or flooring made from repurposed wood.

Appliances Swap in ENERGY STAR-qualified appliances that use less energy, such as refrigerators and dishwashers.

Plumbing Consider low-flow shower heads/faucets and dual-flush toilets to conserve water.

Insulation and Ventilation An energy-efficient home requires both proper insulation and ventilation. Seal windows, doors and pipes, but also ensure sufficient ventilation to allow water vapor to pass through and prevent molding.

"Many of today's homeowners are opting to make their house more 'green,' especially when planning for a remodeling project," Dirksen said. "At Case, we strive to provide homeowners with the latest resources, materials and expertise from certified professionals to assist with incorporating green elements into their design decisions."

For more information, visit www.casedesign.com.

Displaying blog entries 1-10 of 26

Contact Information

Photo of Russell Bryant Real Estate
Russell Bryant
Nuvia Rivera & Associates
244 Louisa Avenue
Virginia Beach VA 23454
Office: 757-383-6368
Direct: 757-748-4087
Fax: 757-394-3112