Real-Estate-AppraisalWhen you buy a house, your lender will require an appraisal on the property before they will complete your loan. Why is an appraisal necessary? Because the bank wants to know that they are not loaning more than the property is worth.

What’s an Appraisal?
Appraisals are completed a week to ten days before the closing. Even though lenders require appraisals, you get to pay for them. The cost is $400 to $500.

Appraisals are conducted by – believe it not – appraisers! These are professionals who specialize in determining the “actual value” of properties. The actual value is based on past sales, features, condition, location, and other factors. Appraisers attempt to remove biases and simply look at facts and numbers.

Appraisers vs Real Estate Agents
Instead of “actual value,” real estate agents determine the “market value” of properties. Market value is the price that buyers will pay for a house in the current market. Market value is based on supply and demand, marketing plans, buyer emotion, and market trends. If a market is active and buyers are frenzied, they will often pay higher prices than past sales appear to support.

What to Look For in an Appraisal
From a buyer perspective, your objective is for the appraised price to be at least as high as the purchase price; anything higher is a bonus. You don’t want it to come back lower than the purchase price. The reason is that lenders loan you money based off the appraised value.

For example, if you are buying a $200,000 house with an FHA loan (borrow 96.5%), and the appraisal comes back at $195,000, then the bank will only loan you $188,175 not $193,000.

If the appraisal comes back too low, you have a couple of options. First, make up the difference out of your own pocket. In the previous example, that means you come up with $11,825 down payment (5.9%) rather than $7,000 (3.5%). Another option is to have the seller lower the purchase price to match the appraised value. Your third option is to terminate the contract and walk away.

Think of your appraisal as a reality-check on the price you agreed to pay the seller. It’s nice when a third party agrees that your new home is a good value – or warns you that the house is over-priced.


Your Best Chance to Sell: the “Golden Window” of Opportunity

Golden Window GraphicWhen is your best chance to sell your house at the highest price? It’s the “Golden Window” – the first two weeks it’s on the market.

The Golden Window is your best opportunity because you are capitalizing on frustrated buyers who haven’t found what they want, or have been beaten out by other buyers. These highly motivated buyers have seen every other house similar to yours and are waiting impatiently for new inventory.

As soon as anything new comes along, motivated, frustrated buyers jump on it like cats pouncing on a mouse. If your house meets their needs and budget, frustrated buyers will bid on it quickly and probably pay your asking price (assuming you priced it well).

On the other hand, if you don’t sell your house within the “Golden Window,” you might as well settle in for the long haul. The odds are it will take many weeks or months to sell it.  That’s because you have to wait for new buyers to enter the market. These buyers are neither frustrated nor highly motivated. They are testing the waters, seeing what’s on the market and what they can get for their money. It takes time for them to acclimate. Some may have to write a contract and lose out, or hesitate about making an offer and lose out, before they understand how the game is played.

As time goes on, you might have to lower your asking price or do something extra, such as include a carpeting allowance, to add more value. This means you net less money.

Your other option is simply to wait for the right buyer to come along.  This takes time and patience.

So the best strategy is to do everything you can to capitalize on the Golden Window.  Research the market so you price your house right. Prepare your house so it shows well and has great curb appeal. Execute your marketing plan so you capture all the frustrated, motivated buyers.

By recognizing and maximizing the Golden Window, you will sell your house quicker and for the most money.

The MS Society

MS Society LogoWhen you sell or buy a property with me, I make a donation to the MS Society after your property closes. It’s one way I contribute to this worthwhile organization and fight Multiple Sclerosis.

The national MS Society conducts important research to find a cure for Multiple Sclerosis. Over the years the MS Society’s made significant advancements in detecting the cause of Multiple Sclerosis and developing treatments.

The local MS Society chapter provides services directly to people in our community. I’ve seen firsthand the great work they do, the need, and I’ve come to trust the people running the chapter.

The MS Society is important to me because my wife, Bettie, lives with Multiple Sclerosis. I would love to see a cure for her sake and everyone else impacted by Multiple Sclerosis.

To learn more about Multiple Sclerosis or the MS Society, please visit

Getting Out of Your Lease and Into Your Own Home

burning-wasting-moneyIt’s the first of the month and your rent is due. As you write out the rent check, you say to yourself, “I can’t believe I’m paying this much money in rent! I’m just throwing my money away! I need to buy a house while interest rates are still low!”

Great idea. But there’s just one little problem: How do I get out of my lease when I find a house to buy?

While you can’t break a lease whenever you want, you do have a few options.

You Could Sublet Your Place. If your lease has six months or more on it, your best bet could be to sublet your place to another person.

You Could Start Searching Near the End of Your Lease. If timing works in your favor, you could start your search with 60-75 days left on your lease. That should be enough time to find a place, get under contract, and close on it.

You Could Negotiate a Month to Month Lease. Some landlords will allow you to have a month-to-month lease and vacate with a 30-day notice. When you get a property under contract, 30 days is enough time to give your notice.

You Could Involve a Real Estate Agent. Your best bet is to engage an agent, like me, and inform him or her or me that you are motivated to buy a home. In addition to selling real estate, I own Rooftop Property Management, LLC and have lots of experience with leases, landlords and tenants. I would be happy to read your lease and talk to your landlord about your options of exiting your lease.

If your landlord is also a real estate agent, watch out for this trick. He or she may offer you a month-to-month deal without a rent increase in exchange for his services. Wow, what a nice person! Except here’s what is really happening: the landlord/agent has threatened to increase your rental rates unless you work with him.

If you want to work with your landlord to buy a home, that’s fine. But if you don’t, and there’s another agent with whom you’d rather work, then let him or her deal with the landlord/agent. A house is the biggest purchase you’ll make. You should be able to work with whomever you want, and not feel coerced into a relationship you’re not comfortable with.

If you feel the time is right to buy a home, don’t let your lease stop you. It’s a minor issue that is easily handled, especially if you enlist a real estate agent who is experienced with leases to help you.

Please contact me if you would like a Free Consultation about your lease and buying a house.

The Home Buying Process

Home Buying Process GraphicHave you ever wondered about the steps involved in buying a home? This is a brief overview of the process I use when working with home buyers.

Buyer Interview
I like to start by learning about you, your goals, and your dreams.

Our Relationship
By law, I need to go over the two types of relationships under which we can proceed. It is your choice which is best for you.

  • Buyer Agent – Agents work as fiduciaries that put your interests ahead of their own.
  • Transaction Broker – Brokers work to put a deal together that is fair for both parties.

Oddly enough, it’s best to start with money in mind. Visit with a lender to see how much you can borrow and what payment you can handle, and get a Pre-qualification Letter. This letter will come in very handy when we go to write an offer.

The fun begins! Based on what I learned from our interview, I’ll look for houses that match your criteria. Then we’ll go out and visit houses with a goal of finding “the one.”

Eventually we’ll find a house that you want to buy. After discussing the price and terms of an offer, I will write a contract and present it to the seller. It’s normal to negotiate one or more counter-offers between the seller and you. Most counter-offers revolve around price, timelines, and inclusions.

Loan & Due Diligence
Once we are officially under contract, we will work on two parallel tracks: getting a loan and conducting due diligence.

  • Loan – You’ll work with your lender to secure a loan on the property. The lender will want to appraise the property to ensure its value is at least as much as how much you offered to pay the seller.
  • Due Diligence – You’ll have the house inspected, make sure you have clear title, and get quotes on hazard insurance (home owner’s policy).

The final step is to attend the closing, which is a meeting between the buyer and seller. Conducted by the title company, the closing formalizes the transfer of ownership. Basically, you sign a bunch of papers, hand over your money, and get the keys to your new home!

For More Information
If you want more information than this brief overview, you have several options.

  • Download an extended presentation (click here).
  • Schedule a personal consultation with Gary.
  • Schedule an introductory seminar for a group of people.

Gary Clark
Century 21 Humpal

Are You Priced to Sell?

terraced-house-for-sale-2-300x200Why is it that some homes sit on the market for a year while others sell like hot cakes? Frustrated sellers will blame a bad market or stupid buyers, but experienced real estate agents know there are no bad markets or houses, just bad prices.

If a home is overpriced, buyers will stay away. But, if the price is competitive with similar homes in the area and “shows” better than the competition, it will have a good chance of selling quickly. One of the biggest strengths a real estate agent brings to the table is the ability to research a realistic price that will cause your house to sell in any market.

Pricing houses is challenging, but a good real estate agent uses a process known as Comparative Marketing Analysis (CMA). The best price analysis is made with similar homes that have been sold within the last 45 days. Longer time frames introduce factors, such as the economy, interest rate changes and market shifts, which can cloud the picture of what your home could sell for.

Although comparing houses with different styles, square-footages and locations is challenging, compensating for various assets, such as nice yards, bigger than normal living spaces, fantastic views, adjacent city parks and other attractions, allows agents to create a level playing field.

However, factors such as the amount of time needed to sell your home can alter the agent’s price recommendation dramatically. If you’re under time constraints because of unexpected job changes or selling agreements you’ve made on other properties, will narrow your chances of selling the home for top dollar in the market. If you have sufficient time to market the home, you can push the price point higher.

Another good benchmark is to review the asking prices of homes that are just under contract and are pending closes. While you can’t know exactly what the final price is, these comparables tell you what is selling right now. Also you can preview the properties to see how your property competes.

A good rule of thumb before setting a price is to make 20 comparisons of comparable properties within a one-mile radius of your house. You should also preview (visit) homes on the market comparable to yours, to see how you compete. Then you can feel comfortable that the price you’ve picked is a good gauge of the home’s worth and won’t discourage qualified buyers.

Being open and honest about your home’s greatest strengths and biggest weaknesses will also help you price, prepare, and market your home. Look at your home as if you were the buyer. Would you pay the price you are asking, if you didn’t own it already? If the truthful answer is “no” then you’ll have to improve something or change the price.

The Sellers’ Guide to a Quick Face Lift

how-to-decorate-your-homeOne of the great challenges to selling a home can be showing all of its space, decor and natural light potential. For example, every home has crowded closets and dead space. Sellers should be aware that areas such as these are easy to spruce-up with a little elbow grease and old-fashioned innovation.

Begin by evaluating your closet/storage space,determine which areas can cut-down in clutter. Go through old clothes, shoes, etc., and get rid of anything that will not be used and in turn create more space. Consider organizing shelves and other areas to make better use of your storage space, including your garage and basement. Also, try to throw out or give away any old furniture that is no longer of use. All of the discarded items can be given to Good Will, Salvation Army or even sold at a yard sale.

“Although most sellers keep their homes clean and well-decorated, it can be difficult to convince a buyer of a home’s potential when clutter is noticeable. As brokers, it’s our responsibility to offer any tips that will expedite the sale and make the experience more enjoyable for the seller,” said Gary Clark, a Realtor at Century 21 Humpal.

Once you’ve eliminated the unwanted items and furniture, begin the ‘renovation’ process. For non-storage spaces that could use a little more decor, consider adding a small bookshelf complemented with a cozy reading chair. Always be sure you’re filtering as much light into your property as possible. Open or replace curtains. For example, light from a window overlooking the backyard offers a room more color, a great view and the illusion of more space.

Always maximize the potential of existing decor; wash old curtains, re-stain old wood casings, anything that refreshes and emphasizes all the potential of the space and decor of the home.

Prospective buyers are often more drawn to homes with features that they don’t have, such as clutter-free closets, open sunny rooms, and cozy little corners. To ensure you’ve realized all of the above characteristics the last step should be to bring in a friend and observe their reaction. Make sure it’s an honest friend, who will offer suggestions as well as notice the improvements. Seeing your own home through a buyer’s eyes is a great way to make a home optimally attractive and more sellable to prospective buyers.

Be diligent in your efforts and be sure the renovations improve the aesthetic appeal of the home. All the hard work will be worth the reward of a successful sale.