Hi everybody!

WOW--talk about HEAT! In all the years I have lived here, it's never been over 100 degrees...until this week! With an even higher heat index! And just looking at the weather channel, it looks like record highs in MANY areas. Drink lots of water!

Anyway, this week I'm going to talk about Home Inspections, what they entail, and whether or not they are worth the cost. I always recommend to my buyers to spend the money to get a home inspection--in this area, on an average 1500 square foot house, the cost is approximately $300. Cost is usually based on the square footage of the home.

So what does a home inspection cover? A thorough home inspector will check a lot of things in the home. They will climb on the roof, and check for obvious leaks, and identify if flashing is loose or broken, as well as soffitts that are damaged or in need of repair. They will also check the electrical system, the plumbing system, turning on all lights and ceiling fans, as well as faucets and showers, and appliances going with the home. This will include the dishwasher, stove, microwave, refridgerator, hot water heater and air conditioning and heating system.

If there are other systems, like a swimming pool, hot tub, etc., those will be checked to be in working order as well.

Regardless of the terms of the sale, (whether a regular sale or an "as-is" sale), getting a home inspection is a good idea for the buyer. This identifies issues that might snow-ball if not known. My husband and I bought a house a few years ago and had a home inspection. It was an "as-is" sale, and the inspector identified a number of electrical issues. This helped us to identify the costs needed for this prior to the purchase. In some contracts, if written accordingly, you can back away if updates or repairs will be over a specified amount. We still bought the home, but got the electrical fixed right away--it was a potential fire hazard.

So what about a seller getting an inspection when they are getting ready to list the home? If it is not an "as-is" sale, and you plan on fixing any issues anyway, it could help your closing go quicker than it otherwise would. I've seen sellers get the home inspection, make all the repairs, and provide all that information to those interested in the home. The buyers could have gotten their own home inspection, but chose not to. It's a personal choice.

SO, is a home inspection worth the cost? As a Realtor® and a home owner, I definitely think it is worth the cost to help eliminate surprises. It doesn't guarantee that things will continue to be perfect and work indefinitely after closing, but it sure helps give peace of mind!

What are your thoughts? Would you get a home inspection when buying? How about when selling your home, before putting it on the market? Let me know!

Until next time!

Valerie Sullivan
Broker/Owner, GRI, e-Pro
Sullivan Enterprises, LLC
www.ValerieSullivan.com
Valerie@ValerieSullivan.net

I have family in town for Christmas and am enjoying the holiday a great deal. Even the dog has been doing his part in being entertaining! Grandpa did by a new rug for inside the front door that Odin can't slide/jam up against the door any more (thus preventing anyone from getting in or out the front door! Odin has still tried--he can't figure out why he just slides across this new rug--and keeps trying!

SO-Just a short note to tell everyone Merry Christmas for this week!

Enjoy your time with your friends and families.

I'll be back next week with interesting real estate topics!

Valerie

Hi all!

I know it's been a while. It has been quite a hectic time this past few weeks, but I'm back on board.

I've made some adjustments with work and am now working for a company called Anderson Auctions, Inc. in Destin, Florida. I'm very excited about the move, and about learning the ins and outs of this niche in real estate.

Anderson Auctions, Inc. mostly auctions off real estate in the Panhandle of Florida. It's another option for sellers selling their homes, as well as buyers when it comes to buying their homes.

With this type of auction, as a seller, you can sell absolute, or reserve bid. Absolute means that the house WILL sell at ANY price. This type of sale usually brings in a lot of bidders because many believe they will bbe getting a good deal. There is a chance the house will sell for less than the seller is hoping, but there is also a good chance a seller will get more than expected.

With a reserve auction, the seller determines the minimum price they will accept. If the bidding does not reach that point, you can decide if it's still "close enough" to sell, or not sell at all.

For the buyer at one of these auctions, you do have 30 days before you have to close on the property. This type of auction property usually holds open houses prior to auction, and you are able to view the inside as well (unless an auction on the courthouse steps).

When you buy a house at one of these auctions, you buy it with NO contingencies--this means you need to either have cash, or already have been working with your lender and become pre-approved (not pre-qualified) for the loan prior to bidding on ANY property. If you cannot obtain financing on a house you've won the bid for, you could be in for a lawsuit, so get pre-approved first.

With an auction sale, it's "as-is" and what you see is what you get. If you're concerned about any issues with the home, and plan on bidding, then it's best to get an inspection prior to the auction.

You can also put a bid/offer in on a property before the auction actually happens. This will be like a regular sale and purchase offer. If you buy the property before it goes to auction, then the auction doesn't happen. If the seller doesn't like your offer, then he'll reject it, and you will have the option of going to auction to bid on it.

As a seller, you will have to pay a marketing fee up front in order to sell your property. The cost depends on your property, the price, and the marketing plan.

When you win a bid on one of these auction properties, you, as the buyer, pay a 10% buyer's premium. This basically pays your closing costs.

When a property is auctioned, it usually happens relatively quickly--within 30-60 days. In a market where property isn't selling quickly and there is a large inventory, this is a good option for a seller that hasn't had any activity on their listing in months, or someone that just doesn't want to deal with going through the traditional listing process.

As I learn more about the auction process, I will pass on that information to keep you informed. And as always, I will continue to talk about different aspects of real estate. Feel free to ask questions as well. I will be glad to discuss them here.

Until next week!

Hi all! I found this information, and couldn't have said it better myself, so thought I'd leave you with this article from Money Magazine. I know the questions about this fall under "how is this bailout going to benefit me?" Good question!

I'll be back in two weeks as I'm going out to celebrate my anniversary with my husband on a cruise for a week!

Enjoy!

What the bailout does for you!!!
The $700 billion bill offers more than just relief for the banking system - it's a sweet deal for John Q. Taxpayer too.
By Amanda Gengler, Money Magazine writer
October 15, 2008: 11:09 AM ET
NEW YORK (Money) -- By now you're well aware that the federal government recently approved a historic bill aimed to rescue our nation's faltering financial system. But what's gotten far less attention than the billions approved to prop up banks, are significant tax benefits included for individuals.

Buried in the 400+ page plan are more than $150 billion in individual and business tax breaks, including another temporary patch for the alternative minimum tax, credits for energy-efficient upgrades to your home and extensions for many benefits set to expire, according to CCH, a tax information and software provider. Some of the breaks apply to the upcoming filing season.

"There are nearly 100 changes to the tax code," says Mark Steber, vice president of tax resources at Jackson Hewitt, a tax preparation company. "There is a little bit of something in here for a lot of people. This is a very pro-taxpayer piece of legislation, separate and apart from the financial bailout related changes."

Here's a rundown on what's new, and what has returned, so you can make sure you're not handing Uncle Sam any more than what you have to.

A quick fix for the AMT. Once again, the government has approved a one-year patch to keep many middle-class taxpayers - about 23 million, according to the tax information publisher J.K. Lasser - out of the reach of the alternative minimum tax in 2008. The law ups the exemption amount this year to $69,950 for joint filers and surviving spouses and $46,200 for single taxpayers. But Congress will have to act again in 2009 for these middle income folks to dodge the AMT going forward.

Mortgage debt forgiveness. The law brings some good news for homeowners who foreclose, sell for less than they owe or restructure their mortgage with their lender. Traditionally, when a lender forgives any mortgage debt, the cancelled debt is treated as taxable income. So previously if you had lost your home, you would have also faced a big tax bill. Double whammy.

The new bill extends a soon-to-expire law that temporarily stops homeowners from owing federal taxes on up to $2 million of forgiven debt. The catch? The debt has to come from purchasing, building or upgrading your primary residence (which includes your original mortgage) - and not from, say, a home equity loan taken out to pay off credit card bills, says Mark Luscombe, a principal analyst at CCH. The new law will extend the break until 2012.

A break on education. Individuals paying college or graduate tuition for their children, spouse or themselves in 2008 and 2009 can deduct - even if you do not itemize - up to $4,000 if your adjusted gross income is $80,000 or less for singles and $160,000 for joint filers. The previous deduction expired last year.

You cannot, however, take this deduction and get the existing HOPE or Lifetime Learning credits for the same person. If you qualify for both you are generally better off with one of the existing credits, says Luscombe. But many individuals who earn too much for the credit can take the deduction, since that income cap is higher, he adds.

A sales tax deduction. For the last few years individuals had the option to deduct state and local sales tax instead of income tax. "This was especially popular in states like Florida and Texas where they don't have income tax, and even states like Illinois, which has a modest income tax but a fairly high sales tax," says Luscombe. But that deduction expired in 2007. The new law brings it back through 2009. Even residents of high income tax states who make a large purchase such as a boat or car during the year may save more with the sales tax deduction then the income, says Steber.

Lower property taxes. Originally only for 2008, but now extended to 2009, homeowners who do not itemize can deduct up to $500 ($1,000 for joint filers) of property taxes in addition to the standard deduction. So homeowners who pay little or no mortgage interest, maybe because they have nearly or already repaid their loan, or they bought the home with cash, can likely save, says Steber.

Tax-free charitable donations. If you're 70.5 years or older you can withdraw up to $100,000 from an IRA and donate it to charity, tax-free. You can tap a traditional or Roth IRA, but you will typically save more in taxes if you go with the traditional account since you can withdraw your Roth contributions tax-free anyway, says Luscombe.

Energy tax credits. The government is enticing you to make your home's energy footprint smaller next year. In 2009 (they skipped over 2008, says Luscombe) you can qualify for a credit of up to $500 for qualified improvements to make your home more energy efficient. These include adding insulation, replacing windows or buying an energy-efficient water heater.

You may also be eligible for a credit on any expenditures for solar or wind power for your home. There's a catch: if you previously took the $500 energy home credit, you're out of luck. It's a one time thing.

Disaster aid. If you were affected by Hurricane Ike or this year's floods or tornadoes in the Midwest, you may qualify for relief, including significant benefits like some of those offered to Hurricane Katrina victims, according to J.K. Lasser. For example, you may be able to deduct more of your losses than traditionally allowed, or to tap an IRA without paying the 10% penalty (you still may have to pay taxes) to help fund the clean up.

<http://money.cnn.com/2008/10/15/news/economy/bailout_tax_credits.moneymag/mailto:money_letters@moneymail.com>

Hi all!

We've had some good rains here the past couple of days--and we've needed it. But now it's time to cut the grass one last time for the winter!

This week's topic--Home Warranty's. I am finding out that many people--those who've owned homes for a while, as well as those who have never owned a home, have no idea what a Home Warranty is, so I'm here to explain them to you.

There are a number of Home Warranty companies out there, and basically, what they are is a company where you "buy" a warranty on your home for one year. It costs approximately $400 for coverage (varies according to your coverage level). If one of the covered systems in your home goes on the fritz--whether is the air conditioning system, heat, plumbing, hot water heater, dishwasher, you name it, you call up the Home Warranty company and say "Hey! It's broke!" and they will send a local company to fix it. You have to pay a fee of about $50 (also varies with the coverage you get), regardless of the price of the repair. The Home Warranty service pays for the rest.

I highly recommend getting a Home Warranty when you buy a home. If it's a new build, though, everything is likely covered under the original builder's warranty, so it's not as much of an issue. With an older home (5 years or more), it's a good idea, though. When I bought my home, it was 8 years old. I got a Home Warranty with it, and 8 months later, my A/C system quit. It cost me $45 for a $1,600 repair. Talk about RELIEF! I didn't have to scrape up that $1,600!!

The good part about a Home Warranty is that you don't have to wait to buy your home to get one. Some companies will only sell them to you when a property is sold, but others don't have that requirement.

When it comes to buying or selling a home, as a seller, you can offer a Home Warranty for buyer's peace of mind. As a buyer, you can request in the negotiations that the seller pay for the Home Warranty. If that doesn't happen, you can always call once you've moved in to your home and tell them you just bought a home and you would like to get a Home Warranty.

You can renew your Home Warranty annually if you so choose, but it is not a requirement. Make sure when you get one, though, that you pay attention to what is covered. I bought a Home Warranty for a property once, and made sure I had coverage for the A/C system, however, found out when I needed it repaired that this company DIDN'T cover geothermal A/C systems. That was quite frustrating. They always say "Read before you sign on the dotted line!" and even though I know that, I didn't this time.

If you have a Home Warranty in effect, and are in the process of selling your home, most companies will allow the warranty to transfer to the new owner.

Good Luck!

Hi all!

As you may or may not know, I have a number of listings that can be viewed on my website at www.ValerieSullivan.net. Well, one of these listings that I have is a property my husband and I own. It's been listed for a few months, and we finally got an offer on it this past weekend.

I've bought and sold my own properties for a few years so one would think it would be no big deal. However, this is the first time I actually lost sleep and became emotional over the whole thing. I analyze things (sometimes to a fault) to figure out the "why's," and this time was no different. I understand getting emotional over a home you've built memories with your family in, however, that was not the case with this home. It was strictly an investment when we bought it.

We rented it out for a few years. It is a cute little Florida cottage, and when we decided to sell it, decided it would be best to make some updates (central A/C and heating and new kitchen, plus a few other things).

I read through the entire offer, and presented it to my husband like I do to any other seller, with all the numbers, and the options, but something just didn't feel right about the whole thing. I could feel it in my gut. I couldn't put my finger on it, though. I had to chuckle to myself because here I am, the one, who on a regular basis helps buyers and sellers do what they can to take the emotion out of a very large financial transaction, and my head was hurting. I couldn't decide ANY direction, let alone spell them all out.

The realization at that point, was this is an excellent reason to bring in a disinterested third party to help iron out the options. But it was too late to call anyone. I'd thought of all the different people I could call the next day, and went to bed...however, lost more sleep over this than when I bought the house I live in! (Which, by the way cost more than this house we received the offer on).

I decided to re-read the entire offer (submitted from another Realtor), and realized two things. Number one; this wasn't a serious buyer. First off, as a seller, I see a serious buyer as willing to put down an Earnest Money Deposit. No such thing here...but that's not all! (Mind you, an Earnest Money Deposit is not REQUIRED to enter in to negotiations, but a good Realtor will tell you that it's generally a good idea. I would not recommend a transaction with no EMD.) Second; this buyer had not even spoken with ANY lenders yet. This, too, is not a requirement to enter in to negotiations, but, again, in the current market, if you are serious about buying a home, show it. Not only to the sellers, but to your Realtor.

One thing that kept going through my mind was "what if this falls through?!" until I realized that if it didn't, it wasn't the end of the world. I've had clients where we negotiated two offers before the third finally stuck--and it was better than either of the first two.

SO what are the major learning points here? There's some for both buyers AND sellers.

Buyers: In any market, it's a good idea to talk to a lender (or multiple lenders) when you're ready to start viewing houses (if not sooner). Find out what you are qualified for. This way you don't waste your time looking at houses that are too small for your needs because you think it's all you can afford. Or on the opposite side, this keeps you from wasting time looking at homes that are out of your price range. If you know what you can afford, it will help your Realtor help you focus in on what you do need and want.

Many sellers are now requiring a pre-approval letter accompany an offer--wouldn't you rather, as a buyer, only have to make one quick phone call while your Realtor® is writing up the offer to get a letter sent over, than have to wait a week...and then find out someone else that WAS ready with their pre-approval letter from a lender snagged up that perfect house?

Also, as for an earnest money deposit (EMD), this money will go for the price of the home. It's not money that you "lose," unless you decide suddenly that you don't like the color of the house and back out of the contract after all parties have agreed to terms and signed the paperwork. This is money that the seller can keep given the right conditions. But it's showing the seller you have "good faith" in buying this home.

Sellers: In any market, it's a good idea to ask for a pre-approval letter to accompany any offer. This way you do know your buyer IS serious about buying a home. If they aren't getting a loan, and expect to pay cash, then ask for proof of funds. This should not be an issue if this is a serious buyer.

Requesting a pre-approval letter will also weed out those buyers who are "just looking" to see what they can get. This will weed out what I call "the time-wasters," that are truly afraid to take that step--for whatever reason.

Regardless of the situation--whether you are a buyer or seller, make sure you talk with your Realtor®. Talk with him or her honestly about your situation. Your Realtor® is there to help you get started with financing if you don't already have it to buy a home. They are also there to answer your questions when it comes to selling your home. Never be afraid to ask the questions, and what it takes to get started.

Good Luck!

Hi! I hope everyone enjoyed the 4th of July weekend! I'm not sure yet if I enjoyed mine, but it was productive! I did enjoy it, watching fireworks with my son and good friends and cooking out, BUT WAIT, there's more! I also installed new wood laminate floor in my living room and master bedroom.

I have a good friend, Michelle, who has remodeled her own homes each time she's moved--and looking at her work, you KNOW she's a perfectionist. She's a plethora of knowledge, so I asked her if she'd help me with my new floors. I've never put down wood laminate, and didn't think having my 9-year-old help was quite enough. One thing I've realized (yet again), is that there is nothing like putting in your own floors to realize why it costs so much for a professional to do the same thing. We spent 2 full days putting in the flooring, taking out carpet and moving furniture. I'm not as young as I used to be!

With that said, the question came up about buying and selling homes, and work needing to be done on them. Of course, as a Realtor, and helping both buyers and sellers, I see benefits of different scenarios. When I talk to sellers about selling their home, I do explain that most buyers do want a home that is move-in ready. Most homebuyers are scrimping to get IN to that new home to begin with, and for whatever reason, may not have extra funds to pay for work necessary to be done, or the know-how (or WANT) to do it themselves.

SO, that said, as a seller, the best case scenario is to have your house as move-in ready as possible. If you're not sure everything that needs to be done, try walking in to your home with the mindset of a buyer. Sometimes that is not so easy, so you can ask a friend, relative, neighbor, Realtor, OR hire a home inspector to do an inspection. A home inspector won't necessarily comment on cosmetic issues, but can identify other things you can't see (loose shingles, faucet leaks, electrical issues, etc.). If it's not possible as a seller to make updates or repairs, you can give an allowance as part of the sale, or else adjust the price and sell "as-is" as a fixer-upper, depending on the condition of the home.

As a buyer, if you know your level of comfort on your new home is that you do want it to be move-in ready, there are a lot of homes that are ready. And there are also many that require different levels of work (I've seen some gutted to the studs). If you don't have the funds, know-how, experience, or just don't want to do the work, then don't waste your time on looking at homes that do require work. If you're comfortable with doing some of the work yourself, then some homes that need "TLC" usually only require paint and carpet/flooring. I've put down wood laminate now, and in the past carpet, vinyl tile and ceramic tile. The one I WON'T do again is carpet. But know your level of comfort on doing the work before jumping in to it!

Neither a buyer or seller, but want to do the updates? This is the position I'm in, and changes that I wanted to make. I know how expensive it is to lay flooring, so when I can, I try doing the work myself. The nice part about being in this position is that you don't have to be in a hurry because you have to sell. You can work at it at your own pace, one project at a time. And this is what makes it more YOUR home, and not what someone else's preferences are/were. Whatever your scenario, by doing the right updates/upgrades to your home, you are increasing the value--which is always a good idea!

The one thing I really enjoyed about putting down my new floors is that because Michelle is such a perfectionist I knew it would be done right (THANKS MICHELLE!), and it was a lot of fun watching it go from the aqua painted cement floor I had (I took out the living room carpet last summer and painted the floor), to the Rustic Pine we put down. It looks awesome and I love it...now we just have to put the baseboards back!

Hi all!

I hope everyone had a great weekend!

I went to a real estate auction this weekend that I found quite interesting. I thought I would share some of what I learned with you. First off, this auction I attended is not like an auction on the courthouse steps that is going in to foreclosure. In Okaloosa County, Florida, you have to have the full amount of your winning bid by the end of the day in the courthouse type auction.

The auction I attended included properties from Panama City to Gulf Breeze, Florida. Some were lots, some were single family homes, and some were even very nice waterfront--both lots and homes. ALL of the properties were short sales, though. I thought that was interesting, because this did turn out to be a different option for both buyers and sellers.

If you've never heard the term "selling absolute" this is an auction term that means that the property WILL be sold to the highest bidder at that bid price. This auction company does not do absolute auctions, but also did point out that you cannot sell absolute on a short sale since the bank does have to approve the price in order for the sale to happen.

So how does the process work in this instance? For a seller who already has their home listed, and wants to try this route, they can work through their agent with the auction company. If it is not a short sale, the seller does have the option of not selling if the bids aren't high enough. The auction house does advertise prior to their auctions which they try putting on once every 4-6 weeks. At this auction a number of the properties already had offers that had gone to the bank for approval, but the bank approved them to still go to auction. After all, someone may come in with a higher bid than what's already on the table. It's likely the advertising that they were going to auction sparked the interest for those that did put in offers.

Those at the auction have no way of knowing what the current offers are that the bank is considering, so that can be a disadvantage.

So how is this a good option for buyers? You do have to pay a 10% buyers premium, which means that you pay 10% above the final bid price. BUT, you can still obtain your financing within 30 or so days. If you're already pre-approved, and you've viewed the property or properties you are interested in, this may be a very good option for you. The specific properties I was there to get a status on did not have a specific open house date(s). A buyer could view them with their agent through the lockbox system agents use.

Since all of the properties at this auction were short sales, that does mean that a property with the "winning bid" still had to submit it as an offer to the bank, for the bank to approve. There were only about 20 people at the auction, and I watched a few leave as soon as the property they were interested in was auctioned off. A few had the winning bids on their properties--and submitted those. Some didn't have any bids at all--which made me think this would have been such a wonderful opportunity for a buyer.

There are other auction companies out there, and I've learned they all do things differently, so make sure you do ask the questions important to you with any that you do work with as a buyer or seller. As the other auction companies sell properties, I plan to attend and share more of what I have learned with you!

Until next time!

Hi all!

The weather here has gotten in to the high 80's over the past couple of weeks with "abundant sunshine" as weather persons like to call it! BUT, as you may or may not know, June 1 marks the beginning of Hurricane Season (I'm from the midwest where a "season" meant we hunted for and killed it...).

Well for those of us that do or have lived in areas ravaged by hurricanes, we know first hand the havoc it can cause. And when you are buying or selling a home, watching one "come this way" can be stressful. You have your house on the market to sell, and now "they" are telling you to evacuate. Or better yet, you have a contract on your house--whether you are a buyer or seller, and suddenly you find out you can't get insurance to close on your set closing date.

While dealing with a hurricane is stressful in itself, you can mitigate some of it when buying or selling a home. In the state of Florida, if a named storm enters the Gulf of Mexico, all insurance companies cease writing insurance binders until the storm completely dissipates or hits landfall. I've seen some hurricanes bounce around the Gulf for what seemed like forever, and then of course, in 2004, where we had 4 grace their presence in Florida. This can increase the stress level considerably.

If you have a house on the market, or you are in the market to buy, you do want to keep an eye on any storms. Once you have an insurance binder "locked in" you are ok. However, if you're buying, and haven't decided on a house yet, you can't get insurance until you have a contract--and of course, an address. If you've found the perfect home, and can't get insurance, the closing will be held up until you can get insurance. You can still make that offer, go under contract and complete everything else you can...and wait. A bit stressful, but knowing you've been keeping an eye on this before hand can alleviate some of that stress.

The two places I go to a lot during hurricane season are of course www.weather.com and www.noaa.com both are good resources of weather information.

Hi all!

I hope this finds you doing well! I spent last week in the second portion of a three-portion GRI-class. GRI is short for Graduate Realtor Institute, and it means I've taken additional education on how best to help my buyers and sellers meet their needs when it comes to buying and selling homes. I learned SO much information last week. I'm glad the class is broken up in to sections so that I can put what I learned in one portion to use before learning more.

Anyway, this week I am going to talk about CMA's, or rather Comparative Market Analysis. This is a tool that helps both buyers and sellers when they are listing their home for sale, or searching for the home of their dreams, or making the steps to get to that point.

In short, a CMA is a "snapshot" of what the market around your house looks like "today." As soon as a new house comes on the market, or another one sells, it will change the statistics, hence the term "snapshot." A CMA is something that your Realtor can put together for you, and they will look at all the sales in your neighborhood, to include thos that weren't listed on the multiple listing service. The point is to look at those houses that are "comparable" to yours. If your house is move-in ready, the house down the street that sold as a fixer-upper isn't a comparable--but it does help to look at the price to guage where you need to be to sell yours. With this CMA, you can determine the average listing price, and average sold price, price per square foot, among other things.

This tool is helpful in determining your list price when selling. For example, let's say the house on the corner sold last week, and you've decided to list yours. Your house is similar in age, size, lot size, number of bedrooms and bathrooms, you don't want to price your house $35,000 more than the one that just sold. Why? Because a smart buyer will use these same tools to help determine if the house they are considering buying is worth the asking price. They will use it to determine what they should offer for a house.

So why not just list a house at $35,000 over the neighbors house that sold last week when someone can just "offer whatever they want to?" Well, because statistics show that a property that is overpriced to start out will end up selling for less than it would have had it been priced properly to begin with. When a potential buyer (and remember, as a seller, at some point you are also a buyer) looks at a house that's just been listed and it's overpriced, they won't take the seller or the price seriously, it stays on the market longer and then potential buyers start wondering what is wrong with it, so they wait longer to "see what will happen" before making an offer. In turn, the seller, wanting or needing to sell the house gets "more" desparate and needs to keep lowering the price to get the activity.

So how do you KNOW for sure if you're house is listed at the right price? Well, at the risk of sounding flip, when you have a contract on the house. In reality, your house is worth only what someone is willing to pay for it. How many people do you know today that are willing to pay $35,000 more than the house that sold on the corner last week--for a similar house? I don't know any. Besides that, when it comes to getting a loan on that house that is priced $35,000 than the neighbors...the appraiser the bank hires uses the same comparables those buyers use. And if a house doesn't appraise for the contract price, the bank is not going to lend over the appraised value. If you still want that house, though, you can always come up with that extra as a down-payment on your own. I wouldn't recommend that, though.

The best thing to do is talk to your realtor, or if you're a FSBO, do your research. Part of selling a home is getting the exposure for your property, and there are many ways to get exposure...I'll talk about exposure and marketing a house in another entry.

Have a GREAT day!

Hi All!

I hope you've had a great week! The weather here in Fort Walton Beach has been as low as the 40's at night, but getting to the low 80's during the day. It's great weather for walking on the beach, but the water is still a bit chilly!

Anyway, we all like the idea of saving money on our homeowners insurance right? I know I do! There's something that's great for current homeowners, as well as buyers and sellers. I've heard the ads on the radio about My Safe Florida Home. Their website is www.mysafefloridahome.com. You can spend a few minutes filling out their form on line and they will send someone out to inspect your home to see how it will withstand a hurricane. If there are things that can be done to make your home more "Hurricane proof" they will let you know what that is and you could even qualify for matching funds up to $5000 to make those upgrades. AND, you can also use the report (and any updates made), give that information to your insurance agent and possibly be eligible for lower insurance rates on your house!

So you ask, "but I'm selling my house soon" or "my house is on the market, why bother?" Well, in a case like this, it makes your house more attractive to potential buyers because you've already found out what (if anything) needs to be done. The inspection is free. It takes less than an hour (I've had it done on my home). You could provide the report to a buyer so they can present it to their insurance company and then they could get the lower rates.

As for a buyer--you have a 10-day inspection period once under contract on your home. If the seller has not already had the My Safe Florida Home Inspection done, you could ask that at be done during the inspection period. Normally, only the homeowner can get this accomplished, not a potential buyer.

Either way, even if you are not a current home seller or buyer, but home owner, visit www.mysafefloridahome.com and have your home inspected. You have nothing to lose!

Feel free to call 850-803-8446 or email me at Valerie@ValerieSullivan.net with any questions!

I've been in a number of discussions lately with people about short sales, and the motive of the banks. It's not easy to figure out what "the bank" wants (any bank), even when they tell you, because the answers seem to be always changing, but I thought this was an interesting article from the Wall Street Journal to pass on...

Why Lenders Are Leery of Short Sales
Wall Street Journal (04/17/08) P. D1; Simon, Ruth; Hagerty, James R.
The National Association of Realtors says 18 percent of home transactions are now short sales, though experts point out that lenders are reluctant to approve such deals. Research from Clayton Holdings Inc. reveals that lenders lose only 19 percent of the loan amount on average with a short sale, compared to 40 percent on a traditional foreclosure sale. However, short sales require approvals from primary lenders, servicers, investors and home-equity lenders--a process that can take several months to complete. Mortgage servicers blame delays on staff shortages resulting from the unexpected rise in problem loans, and Mortgage Bankers Association senior director Vicki Vidal points out that pricing also poses a challenge because buyers are making low-ball offers on distressed properties. While servicers prefer rep ayment plans and modifications to short sales, the process is getting easier for borrowers who are encountering financial difficulties but continue to make timely payments. Additionally, Fannie Mae and Freddie Mac both are taking steps to speed up the process, with Fannie Mae looking to make acceptable minimum prices known beforehand and Freddie Mac giving servicers more leeway in approving short sales.

With all the real estate shows on TV like "Flip This House," "Flip That House," "Design on a Dime," "Extreme Home Makeover," and the plethora of others available, I've heard the questions "is it really possible to make that kind of money?" Well, it depends (don't you hate hearing that?). With all the books out there, the bottom line of so many of them are that "The Key to True Wealth is to Buy and Hold" when it comes to real estate--just ask Donald Trump. Most times that means you become a landlord, or you're holding vacant land for future sale. Of course it's harder to sell it quickly than if you were to sell stocks or bonds.

But that option may not be for you, and the thought of making $50,000+ in one flip transaction can make anyone's mouth water. So how do you know if there's money to be made in your local area? While there is a lot involved, I'm going to outline what you need to look at here to give you an idea of what to consider before making that step.

Before you buy an investment property, the first thing you need to think of is multiple exit strategies. While your intent may be to flip it, what happens if you have more money in it than its worth by the time you're finished? Or the market takes a serious downturn before you're finished. Hopefully you prevent this by coming up with a budget and time frame and sticking to it, but having an idea of maybe renting it out, or various ways to sell it (maybe seller financing could be an option), will help you adjust quickly if you need to.

That said, you need to compare your "target house" with similar others in the area that aren't fixer uppers and see what they are worth "now" on the re-sale market, as well as the rental (in case that becomes an option you need to use).

Some fixer-uppers only need a coat of paint and new flooring--which considering how much is done on some (just watch any of those TV shows I mentioned!), is not bad. If it's possible prior to buying or closing on the property, the best thing to do is to get a professional inspection on the property, and then have people come out to give you estimates on work that's required. A general contractor can do just about anything that's required, however, they can also be quite expensive. Sometimes it is more cost effective to hire the different subcontractors yourself or do the work yourself, depending on your time constraints and personal experience. The best thing to do is get 3 estimates--or more if you're not comfortable with those three. In this area, estimates can vary greatly. Don't be afraid to call around, and ask a lot of questions. The things you need to consider are the electrical and plumbing (if the house is older, it may need to be brought up to code for the best benefit). What about the A/C system? Pulling out old carpet and painting will get rid of most smells (especially if previous owners/tenants had indoor pets and/or smoked inside). Just make sure to wash down walls and floors before painting and putting new flooring down to help eliminate those smells. What is the overall condition of the walls (1970's paneling? or holes to be repaired?) as well as the condition of the bathroom(s) and kitchen. Some updating can be done by just putting a coat of paint on it, others require complete replacement. And as the new owner of this property, that choice is up to you. The point is that you want to market your home to the highest number of buyers possible--so while thinking of what needs to be done, keep that in mind.

Of course, as you are getting your estimates together, you add up what your budget should/will be, and add that to what you are paying (or planning to pay) for the property. If the current fair market value is well above what those costs are, then it looks like you'll be able to make money. But keep in mind what your holding costs will be as well. If there's a loan, there are loan payments. As always, property taxes and insurance will need to be paid.

And, as always, there are taxes on the profit you do make. Everyone's situation is different, so it is best to contact your tax professional--one that deals with real estate. If you hold a property for over a year, then your capital gains on it is 15%, however, in the case of fixing and flipping, it may be considered "ordinary income" and get tacked on to whatever your earned income is for the year--so depending on your tax bracket, you may pay higher taxes than that 15%.

The bottom line? When buying any property for an investment, make sure you do all of your homework first. Ask a lot of questions, do a lot of research. The information is out there for everything you need, but it does take time to find it, put it together, and then to fix up the property. Many people like the idea of doing something like this "on the side" in addition to their day job, however, there is a lot of work involved, whether you choose to do it yourself or hire someone else to do the work. If you're serious about it, there is money to be made, but you need to have a plan and go from there.

A relatively new term coming to light in real estate is called Short Sale. I'm asked what is a short sale and how does it work.

A short sale is when a home is sold for more than is owed on it. It's an alternative, or rather, a step prior to going through foreclosure. Chances are that if the house is selling for less than what is owed on it, the current market value won't support the current loan amount. The seller will need to work with their lender, and find out what needs to be done to accomplish a short sale. When a realtor is involved, the seller can sign paperwork allowing the realtor to discuss negoations directly with the lender and their loss mitigation department.

In buying a short sale house, not only does the seller have to approve the offer, but so does the bank/lender that is holding the loan. Because of this, buying a short sale house may take longer than the average (approximately 30 days) to 60-90 days--sometimes longer--depending on the lender. Some of these homes can turn out to be very good deals, but as with the purchase of any house, it is best to do your due diligence--get an inspection, check things that are pertinent to you as a buyer, find out what your taxes and insurance will be and work closely with your own lender and Realtor.

So how does a short sale affect the seller? In the past, if a seller sold their home for $50,000 less than what was owed, the bank/lender would send the seller a 1099 at the end of the year identifying this $50,000 as income you received and then you would owe taxes on that $50,000. Due to the recent upswing of foreclosures and shortsales, though, this has recently changed, and banks are supposed to be forgiving these amounts. It's best to check with your tax professional first to find out what your specific circumstances are--everybody's tax situation is different. Information can also be found at www.irs.gov and searching on "short sale."

If you have further questions, feel free to email me or give me a call!

Many people ask me if this is a good time to be buying or selling real estate. Some people try to "play the market" like buying stocks and bonds. One thing to remember when buying real estate is to figure out what your goal is first. Then you have to keep in mind that buying a home for any reason is a long-term investment.

If your real estate purchase is to be your primary residence, it is more than a financial investment, it is emotional, and it's practical, and it's where you are going to be spending the majority of your time when you are not at work. For those of you fortunate enough to work from home, that's a LOT of time. You'll be building memories for you and your family--whether your family consists of humans or animals--or both!

As a buyer, consider this, you have to live somewhere, so if you're paying a mortgage, why not it be yours? If you're paying rent, you're paying someone else's mortgage. You do have more responsibilities as a homeowner than a renter does, however, you don't have to get permission to paint, or make changes to your house. You get to live by your own rules, and not your landlords rules.

When you own a home, you have the advantages of writing off the interest you pay on your mortgage on your tax return. In the first few years, this is a considerable amount. You can also write off the property taxes you pay. This amounts to most of what your monthly payments are. You can't write off rent. At least not in the State of Florida.

As for selling property in the current market, some are concerned that "this isn't the time to sell," and "we haven't seen the bottom yet," or "it's going to take a long time to recover." We all need to keep in mind, though, that anyone you talk to or listen to, or the articles you read, including mine, are just opinions. Not one of us has a crystal ball that can tell you for sure what will happen next week, month or year with any definitive guarantee. The two things that sell a property are marketing and price. The realtor you choose has control over their marketing efforts and how they get exposure out there for selling your home. You, as the seller, have the control over changing the price of your home if you are not satisfied with the showing activity.

Whether you are a buyer or seller, you, like everyone else, want to get the best deal they possibly can. For some buyers that might be the features in the home, others it may be the price of the home, many times it's the payment and terms of the payments, and for everyone it is varying combinations of these things. For those same homes, and the sellers, it may not only be the price, but other unique circumstances, like needing to wait 60-90+ days to close, or closing as quickly as possible.

To be honest, the best time to buy or sell real estate is "yesterday." As long as you don't treat buying and selling real estate like stocks and bonds to be bought and sold quickly and on a whim, you'll be fine. Make sure you do your homework on what the current local market conditions are when you are ready to buy or sell, and don't be afraid to ask a lot of questions!