Selling a home "as is"

bulletandpima
Fri, 16 Apr 2010 09:38:10 +0000

Mouse, no what I am saying is if you don’t put 20% down or don’t have a VA loan, you will be required to pay PMI. PMI is much more expensive than taking the second loan.

You can also put 20% down and ask the lender to do it like an 80/15/5. What happens is they immediately open that equity line, but at settlement since you put 20 down, the line will have the 15% availability, but no balance, thus you have a safety net. Many buyers elect this route because if they don’t do it then, they will pay re-fi costs if they do it later and that could be thousands of dollars depending on the size of the second.

DO NOT go this route if you see it as a new credit card because now you will hurt yourself fiscally. If you don’t have great restraint it will be your demise.

Some also choose this route because they know that in a few months they will need a new car, and since the equity line is tax deductible it is seen as a better option than taking a typical car loan. Caveat that only applies if the car loan is in the 5% rate.

Others that we call slumlords use this to buy rental properties. They actually create their own Ponzi scheme. They then take that 15% equity and use it to buy a rental using another 80/15/5, and so on and so forth, I have seen buyers land up buying 3 or 4 properties just from that 15%. Granted they continue to get smaller and less desirable, but they don’t care since they will be renting them.

You are required to buy lender’s title insurance, but not home owner’s title insurance. The lender has a vested interest and will be named in any lawsuit since it is a lien against the home, not the person. That means they will hire an attorney to defend them not you, even though you paid their title insurance portion, it does not mean you get to ride on their coattails and get off free. Your owners title insurance is to defend your name on the title.

It is confusing, and trust me it is much more complicated than that, but I just am trying to make it as simplistic as possible to explain why you need to buy it.

As far as de-cluttering I 100% agree. If you still have a box that you never owned from when you moved in 5 yrs ago…DUMP IT, because obviously you lived quite nicely for 5 yrs without it.

De-personalizing, I am the rare bird. Everyone says to remove personal pictures because you want them to see it as their own home or that they will be busy looking at the pics and not the house. I have yet to find this is true. Yes, they take a quick gander, but once their curiosity is filled they are back to business and looking at the house, not the pics. Secondly, many times it actually makes an emotional connection…look honey, isn’t that baby cute or how sweet they all look!

The flip is the couple could be a 2nd marriage and the people in the pic in the home might look like the ex!

It is important to realize that if you de-picture the home be prepared to paint. Many people have pictures that are portraits or collages, remove them after hanging there for 5 yrs and I can guarantee you that there will be discoloration of the wall. The next thing you know is that one picture has forced you to repaint the whole house. I.E. livingroom is connected to the dining room which is connected to the kitchen which is connected to family room. You intended to only do one room, but as soon as you had it done, the attaching room looked dirty, so you kept going.

If you don’t paint and you do have that X marks the spot from de-picturing, the buyer will do 2 things. 1. remember the house and designate it as the one with the X marks the spot home, and you don’t want that to be your description. 2. Lower the price because they already know that the walls will have to be repainted and you don’t want to be in that position.

The simple thing to do is to keep the pic up. Realize to get the walls back to not having that mark you will have to bleach the entire wall since the picture never saw day light it will be your original color.

I also agree if the carpet is really in bad shape, go to the cheapest store and buy all new carpeting. The fact is if the buyer loves your home and you are a top contender they are going to make their decision based on that carpeting. They are either going to low ball you and use carpeting as an excuse for their price or they are going to choose the 2nd runner up because it has less work to do on it to get to their stds. Either way your home sales price will decrease. It will decrease because it will be long on the market because of the carpet, and eventually the person who buys it got a good deal because you lowered the price since it was on the market long AND you went off and gave a carpet allowance on top of that!

GO back to my adage don’t be busy picking up the pennies while you jump over the nickels.

Additionally sellers will say I will give a carpet allowance and have the realtor put this in the remarks. Theory is the buy gets to choose their carpeting…aren’t I considerate philosophy. REALITY buyer sees it as a red flag that the owners know the house needs work and they use it to their advantage to nitpick about everything and still offer a lower price. Remember this is not personal it is business. They want the best house for the lowest price, you want the best price.

On top of that in our MRIS/MLS forms we only have a limited amt of space to describe the home. Writing cash allowance takes space and the realtor will then have less room to hit a high light, what you essentially did was make them advertise a negative. Not a good sales technique.

TIP of the day:

Remove your screens and place them in the garage. You would be amazed how much brighter your home will look without the screens and as I have said before nobody ever walks in and says OH this house is too bright!

Also make sure you check your front door lock and that it works easily. Nothing like a realtor with clients on your step forcing the door to open to send off a bad signal. It also gives them time to really inspect the outside of the home. More times than not if this happens the man will wander off and start looking really hard at the outside. If it doesn’t happen they usually glance, walk around, but they have already made their decision from the inside out.