URBALO

An article pulled out of Money CNN

” Not long ago, a well-known economist surprised me by suggesting that it’s a good time for homeowners to tap their equity to buy stocks.

Crazy, I thought. If you had risked your house to invest in the stock market before the dotcom crash, you could have lost everything.

But his idea got me thinking. For many of us, our house is our biggest cash reserve, and raiding that piggy bank made financial sense for years because interest rates were low and rising home prices kept replenishing the bank.

Now, with rates up and prices soft, is there any reason to tap your home equity?

What’s changed

Opening a home-equity line of credit is no longer a slam dunk for three reasons.

It’s not cheap money Even though rates may drop in 2007, in recent years they’ve been going up, up, up. At today’s average rate of 8.7%, the interest-only monthly payment on a $100,000 HELOC is $725 vs. $387 when rates hit their lows nearly three years ago.

You could owe more than you own Lenders have made it possible to borrow 100% of your home’s value. During the housing boom, for instance, many buyers who were stretching to afford a home financed the down payment with a HELOC. Do that today and if prices fall, your home loans could add up to more than your house is worth. If you have to sell (and pay a realtor 6% or so), the difference will come from your wallet.

The market may not bail you out Throughout the boom, homeowners financed lavish upgrades with HELOCs, confident that the run-up in their home value would outstrip the cost of construction. Without that tailwind, you can’t be sure you’ll recoup everything you put into your home. You’re paying nearly 9% to make an investment that’s no sure thing.

What to do

Despite all of this, you may still want to tap your equity - it’s easy, and interest on as much as $100,000 in debt is typically tax deductible. Just be careful.

Make it the right reason That includes doing wise renovations, especially if you plan to stay put indefinitely, but not such extensive ones that you own the biggest house on the block.

Shop smart You can eliminate rate worries by locking in a fixed payment instead. Rates on old-fashioned home-equity loans are actually lower than HELOC rates today - 8.1% on average. If you prefer the flexibility of a HELOC, take advantage of all the competition among mortgage lenders and check the Web for deals in your area (Bankrate.com and HSH.com are good sources). By opening a checking account or getting the payments automatically debited from your account, for example, you can lower your rate by a half to a full percentage point.

Make A Good First Impression

You only get one chance to make a first impression. Make sure it’s a good one. You want your home to be warm and inviting to the buyer. Clean up any clutter lying around. Stack the magazines, throw away old newspapers, and put all your loose papers in a drawer. Give your home a proper cleaning before the viewing. The more at home a buyer feels, the more likely they are to make it their home.

As a seller, you goal is to sell you home for the best price as fast as possible. Help you agent out. When the buyer enters the door, they try to picture themselves living in you home or condo. The better the buyer can see themselves living there, the better chance you have to turn a casual prospect into a seriously interested buyer.

Kitchen: A great looking kitchen can be a selling point in a house. The kitchen of a home for sale should only have the bare necessities. Think “what can I live without” and pack those items up. This will also save you time later in the moving process. The kitchen should have good aromas or no smell at all. Sinks and floors should be clean and dirty dishes out of sight. The cabinets should be wiped down and the appliances free of food and crumbs. Bathrooms: If there is a leaky faucet or toilet, get it fixed. If the tub or sink has a chip in it, get it repaired. Replace worn out or dirty grout. Make the fixtures sparkle and clean the mirrors and vanities. Put out fresh towels and coordinate them in one or two colors. Have a clean shower curtain or doors, with no mildew. Remove any unnecessary items from countertops, tubs, shower stalls and toilet tops. Keep only your most needed cosmetics, brushes, perfumes etc…, in one small group on the counter. “Bathrooms are so important,” Templeton said. “So many times a dirty faucet or dingy toilet can break a deal.” Closets: They look larger when there are fewer items stored in them. Neat, well-organized closets show there is ample space available for the new homeowner and their things. This is a great area to get ahead on packing. Garage and basement: Keep everything neat and uncluttered. Put everything away that is not part of the decor. Oil squeaking door hinges, tighten loose cabinet knobs and fix faulty wall switches. Organize or pack away tools not in use and discard boxes and scrap materials. Small rooms, problem spaces Dealing with small spaces seems to be one of the most common decorating dilemmas, according to Winter. It is not true that small items in a small room will make it appear bigger. In, fact three of four deliberately over scale items in a room will fool the eye into thinking the room is larger than it really is.

Do’s and Don’ts Of Home Showing

Read Full Article ->

Selling your home can be an exhausting experience. Last minute walk throughs, inconvenient calls, price adjustment and the possibility of being stuck with two mortgages are real concerns.

The difference between a profitable smooth transaction and a break even, miserable experience is often a fine line. In the majority of cases it comes down to the subtle know how of your professional. By utilizing the knowledge of a well-trained real estate professional, you’ll ensure the quick, profitable sale of your home.

Mistakes to avoid:

1. Refusing to Make Profit Inducing Repairs
   It always costs you more money to sell ‘as is’ than to make repairs that will increase the value of your home. Even minor improvements will often yield as much as three to five times the repair cost at the time of sale. Your agent will be able to point out what repairs will significantly increase the value of your home. Seemingly small fix up jobs can have quite an impact.
2. Provide Easy Access for Showings
   Accessibility is a major key to profitability. Appointment-only showings are the important, but use of a lock box makes them less restrictive. However there are certain considerations to take into account: your lifestyle, time frame for the desired sale and the relationship with the person representing your interests. The more accessible your home is, the better the odds of finding a person willing to pay your asking price. You never know if the one that couldn’t get a viewing was the one that got away. By developing a trusting relationship with an agent, he or she will show the home with your best interests in mind.
3. Priced Too Low/Priced Too High
   One critical reason to find an experienced professional real estate investment professional is to make sure the property is priced appropriately for a timely and profitable sale. If the property is priced too high it will sit and develop the identity of a problem property. If it’s priced too low it could cost you considerable profits. The real estate market has subtle nuances and market changes that should be re-evaluated by your representaive every 10-14 days to help you maximize your return.
4. Relying Solely on Traditional Methods To Sell Your Home
   The real estate professional who is innovative and willing to offer new strategies of attracting home buyers will always outperform those who rely on traditional methods. Demand around the clock advertising exposure, innovative lead generation methods (such as this blog). These services exist and should be offered on your home sale.
5. Market Timing/Seasonal Selling
   Just as a broker who continually follows the trends of a stock, your real estate professional continually follows trends of your home market. They will know if the market cycle is poised to net you the most money. Avoid believing that property sales are seasonal.. property is always selling.
6. Refusing to Make Cosmetic Changes
   The prospective home buyer’s first impression is the most important. Hundreds of thousands of home sales have been lost to unkempt lawns, cluttered rooms, bad stains, unpleasant odors… all the seemingly little things. Imagine you were the home buyer and clean your place from top to bottom …
7. Wasting Time With An Unqualified Prospect
   Your representative’s responsibility is to screen a prospect’s qualifications before valuable time is lost. Be sure to align yourself with the right professional and eliminate negotiating with unqualified prospects.
8. Don’t Test The Market
   Never put your property on line to sell unless you are serious. The right professional will find you buyers and if you are harboring indecision… you will blow the sale.
9. Believing You are Powerless to Make a Difference
   Be a part of the team! Take an active role with your real estate professional to see what you can do to facilitate your sale. Networking with professional peers and personal friends often results in the sale of a home. It’s surprising how many homes are sold this way.
10. Not Considering Other Financing Terms
    Cash is not always the most advantageous transaction. Income level, tax benefits and current legislation are all critical factors when considering purchase terms. Real Estate Professionals are experts at home transactions and can lead you down the path that will give you the highest yield.
11. Believing All Realtors, Brokers & Others are the Same
    With all the intricate details and critical decisions to be made concerning your home sale, should you rely on anyone but an experienced real estate professional? Many friends and family members have been estranged as a result of failing to meet expectations. Your home sale is a time consuming, effort related, difficult task. Maximize your profit by utilizing a experienced real estate professional.