You know the saying: “If it sounds too good to be true, it’s probably a house flip.”
Isn’t that how it goes?
Okay, maybe that’s not the original phrase, but the house flip frenzy is still happening for the same reason diet pills and spray tans are popular – we like things to be fast and easy.
Flipping houses is a gamble; and as in gambling, sometimes you win and sometimes you lose. If the stars align and you find an underpriced house in a great neighborhood that needs a little TLC before hitting the market, you’re probably going to make some money.
But. . .
If you find that same house and then uncover the creeping mold, the cracked foundation and the sketchy electricity, you can say goodbye to your profit and your sanity.
Don’t get me wrong here – I am not against house flips. On a big, big scale it can be good for the seller, the buyer, and the neighborhood. After all, updating an eyesore and finding owners to love and cherish a property is a good thing.
Still, with television shows such as Property Brothers and Flip or Flop, with all of their fancy lighting, hunky contractors and 30-minute timeframe, it’s easy to get swept up in something that appears to be fast and easy when, in real life, it can be slow and really, really (really!) tough.
Planning on buying a ‘fix and flip?’ Here are a few tips to keep you in the money, instead of landing you in a money pit:
Rely on a Realtor and Other Professionals:
Realtors, real estate attorneys and accountants can help you navigate the dollars and sense of an investment. Could buying this house put your financial future in jeopardy? Or your other properties? Or your bank account? Before taking this step, recognize what’s at risk with you and your investments.
When it comes to the nuts and bolts of things, surround yourself with reputable, experienced professionals. Make sure all of your contractors and suppliers are licensed, insured, recommended, honest, trustworthy and competent. Also, work with people you like. You’re going to be working side-by-side on a huge project, and you want to get along with the people who are literally putting your house together.
Don’t Be a Hero:
If you have questions, ask. If you don’t agree with a suggestion from a friend, investment partner, supplier, speak up. If you don’t know how to rewire the water heater, don’t! Just don’t!
Do Your Due Diligence:
There are insurance policies for building repairs that all licensed contractors must hold in order to be in the business. There are specialty policies for buildings that are vacant or under construction. There are home warranties that can protect the appliances already in the home. Looking into insurance is just a way of looking out for yourself.
Look Under the Hood:
Hire the best inspector you can find and don’t balk on the cost. I promise that in the end this expense will actually save you money. An inspector knows what to look for, what is an easy fix and what is a nightmare. Stay away from the nightmare. Nightmares are…scary.
And Back to the Realtor:
No matter how great the house looks, if you don’t have a savvy Realtor on your side, it’s not going to sell. Look for a Realtor who has pulled comps for your neighborhood. Look for someone with experience, a solid marketing plan, a list of recommendations and a network of buyers and sellers.
This blog is a first in a series on the frenzy over fix and flips. Look for part two in the weeks ahead. In meantime, do you have a fantastic or frightening fix and flip story to share? Let’s hear it!
I’ve been in the real estate business for a long time, so you’d think I couldn’t be surprised by anything anymore. Oh my friends — how wrong you are! I am surprised when I see a house with a hot tub in the main living area. I am surprised by cat pictures hanging everywhere. I am surprised that sellers think cooking fish the night before a showing is a good idea.
But the thing I am still most surprised by is the lack of attention even savvy sellers give to the outside of their homes. I’ve had clients de-clutter, paint, and stage their homes in a way that would rival design magazines, yet they’ve overlooked the old doormat out front. The dead plant on the back patio. The screen door that has been attacked by — well — probably those cats who were featured on the walls of that aforementioned home, but I don’t have proof. Cats are very sneaky you know.
Whether you are in the market to sell or just in the market to enjoy pulling into your driveway everyday, curb appeal is, as Martha would say, “a good thing.” And it’s not hard, it doesn’t have to be expensive, and it can change your listed home from a ‘maybe’ to a ‘make an offer’ — really. After all, buyers looking at your home is the equivalent of a first date. Remember first dates? Ah – first dates. You were a little bit nervous. You wanted to look your best. You cleaned yourself up. You put on a little shine. You smiled. You made yourself available for a second glance. You were ON THE MARKET for God’s sake.
Now your house is on the market. Be nice to your house and buy her a new coat of paint for the big (listing) date. Maybe trim the trees a bit, wash the windows, fix the cracks. Better Homes and Gardens offers a list of 20 ways to update your home’s exterior. I am not listing them all because, let’s face it, adding stone veneer probably isn’t on your list of to-dos. But if it IS, check out the full list here and let me know how it goes. In the meantime, try some of these smaller, more manageable projects:
Dress up the front door
Your home’s front entry is the focal point of its curb appeal. Make a statement by giving your front door a blast of color with paint or by installing a custom wood door. Clean off any dirty spots around the knob, and use metal polish on the door fixtures. Your entry should also reflect the home’s interior, so choose a simple swag or wreath that reflects your personal style.
Replace old hardware
House numbers, the entry door lockset, a wall-mounted mailbox, and an overhead light fixture are all elements that can add style and interest to your home’s exterior. If your existing pieces are dated or dingy, your home may not be conveying the aesthetic you think it is. These elements add the most appeal when they function collectively, rather than as mix-and-match pieces. Oiled-bronze finishes suit traditional homes, while brushed nickel suits more contemporary ones.
Create perfect symmetry
Symmetry is not only pleasing to the eye, it’s also the simplest to arrange. Think about it like a necklace with matching earrings. Symmetrical compositions of light fixtures and front-door accents create welcoming entryways.
Create an instant garden
Container gardens add a welcoming feel and colorful appeal to any home exterior — quickly and affordably. You can buy ready-made containers from garden centers or create your own with your favorite plants. For most landscapes, a staggered, asymmetrical arrangement works best to create a dynamic setting.
Do a mailbox makeover
Mailboxes should complement the home and express the homeowner’s personality. When choosing a hanging drop box, pick a box that mirrors your home’s trimmings. Dress up mail boxes by painting the wooden post to match the house’s exterior color, or by surrounding it by a beautiful flowering garden.
Renew planter beds
Get garden beds into shape by pruning growth, pulling weeds, planting flowers, and adding new mulch to restore color that was taken away by sunlight and harsh weather. If stone or brick borders your bed, consider cleaning and resetting any pieces that are soiled or dislodged. If your border is old or tired-looking, try upgrading to stone or a decorative cast-concrete edging system.
Install outdoor lighting
Low-voltage landscape lighting makes a huge impact on your home’s curb appeal while also providing safety and security. Savvy buyers scope out neighborhoods at all times of day. Fixtures can add accent lighting to trees and the house or can illuminate a walking path. If you aren’t able to use lights that require wiring, install solar fixtures (but understand that their light levels are not as bright or as reliable as their wired counterparts).
Replace gutters and downspouts
If your home has an older gutter system, odds are it’s also suffering from peeling paint, rust spots, or other problems that can convey a sense of neglect. Replace old systems with newer, snap-fit vinyl gutter systems that go together with few tools and require no painting. Copper systems, while pricier, convey an unmistakable look of quality.
Dress up the driveway
If your driveway is cracked or stained or has vegetation sprouting from it, you can upgrade it without a complete redo. First, repair the cracks and stains (and kill the weeds), then dress it up by staining the concrete or affixing flagstones. If you need more room to move your car or park, add stone, brick, or pavers to the sides of the drive to widen it with flair.
Please tell me how you have or plan to dress up your house for its next hot date! Visit me on Facebook and share your story.
Last year, the real estate market was, well, crazy. I mean crazy in a good way. Crazy can be good, unless it involves people behind the wheel of a car or B-list celebrities.
In 2013, homes were flying off the proverbial shelf, sometimes going under contract within three hours of being listed. The median price of homes rose and foreclosures dropped and mortgage rates were actually affordable – good, good, and more good.
So what does that mean for 2014? While 2013 was a fantastic year for real estate, it doesn’t mean 2014 won’t be great. Granted, 2013 is a tough act to follow; but predictions for this year are positive, with experts believing that home sales will remain at or near the current level and prices will hold steady or even rise a bit. There will likely be a better balance between buyers and sellers, alleviating the panic buyers, concerned with the reality of losing the house of their dreams, felt this past year.
What can you do if you are hoping to buy in 2014? Reach out to me or you personal Realtor now rather than later and provide me with your wish list. Be specific, but flexible. As Realtors, we are constantly touring homes, talking with sellers, and learning of properties that are not yet on the market but may be coming soon. By sharing your wants and needs with us now, you are one step ahead of other buyers in the marketplace.
Thinking of selling this year? Be cognizant of that fact and keep it in the forefront of your mind when making big and small decisions, including renovations, welcoming new pets into your world, and even buying non-essentials for your home. Remember that you are planning on showing your property at some point, and when that happens, you will have to de-clutter and clean to position your property in the best light.
Got a leaky faucet or a non-working fireplace? Tackle those projects now to avoid the mad dash later. And now is not the ideal time to housetrain a puppy (is there ever a good time for this job…I’ve done this more times than I can count and let me just say, wow?!) or paint your bathroom Bronco’s orange or start collecting bottle caps from around the globe. You can do all of those things in your next house – for now, keep it simple and save yourself some crazy.
I am grateful. And not in a casual yeah, yeah, I count my blessings sort of way, but for real. Why? Well, for a lot of reasons, including you. Yep. I am talking to you; my friends, colleagues, family, and clients.
I wish I could say that every single day I ponder the good things that happen; the moments and memories that shape my life. But I am busy. We are all busy. So some days I am just racing around town like the rest of humanity, checking off tasks and selling houses and meeting clients and squeezing in a social life and a workout and a walk with my dogs.
But this week I have truly carved out some time to remember the people and events that left a happy mark on the permanent record of my life. What a concept – ! Using Thanksgiving week to be thankful. I am reflecting back on the joy and prosperity and friendship that makes each and every day a gift, those pieces of the pie that made this year deliciously delightful.
Speaking of….you know what goes really well with introspection? Pie. Really, pie and pondering is a match made in heaven and I can prove it. After some friends told me about how happy everyone was at a pie party they had hosted, I thought: I like pie too – maybe I should have a pie party?! So I did. Yesterday, I had a handful of guests pop by for my first pie party and I believe it may be an annual tradition. I am now a pie party pro. My mother would be so proud.
The thing about a pie party is you get to eat and drink and celebrate and laugh and then when you say goodbye to your friends, you can send them home WITH A PIE! I know, brilliant, right? It was a success; and I am blessed.
May you, too, be blessed throughout the holiday season and coming year with much peace, joy and prosperity. And a little pie. Happy Thanksgiving.
I’ve sold hundreds of houses over the course of my career and while every single client and every single house is unique, one thing always remains the same: houses cost money.
I know, I know – that’s the worst part, isn’t it? You’re all wrapped up in the glorious backyard and the stainless appliances and the fabulous school district and just as you are dreaming about paint colors and Thanksgiving tablescapes – WHAM – the money monster starts creeping in.
Don’t panic. Mortgage rates may not be at an all-time low right now, but they have found a nice, cozy spot at approximately 4.5 percent for a 30-year fixed loan. And while they may continue to rise, experts don’t foresee and huge jump on the horizon, which is good news for buyers now and in the near future.
So while luck (and a very good Realtor…ahem) may have led you to your dream home, finding the best mortgage deal takes a little more than good fortune. A recent article in The Denver Post simplified the process of securing a mortgage and, being the nice girl I am, I thought I’d share some advice:
Do Your Homework:
- Check your credit report with the three credit reporting agencies: Equifax, Experian and TransUnion. Don’t be nervous – I equate this to going to the dentist – it never is as bad as you expect.
- If you notice errors, get them corrected.
- If possible, pay down outstanding debt to improve your score.
- Resist buying new cars or other big ticket items (yachts, castles, Hope Diamonds) while applying for a mortgage and during the time until your closing date.
- Get pre-approved before shopping for a home – this will classify you as a strong buyer and sellers will be more attracted to your offer if they know it is solid. Looking for a good lender? Call me! I know the best lenders in town; people you can trust and who can get the job done quickly!
- Define how much you want to spend, or better yet, what you can afford. This will help you narrow your search and help you avoid over-spending when shopping for a home.
Find the Best Rates:
- A standard loan offers fixed interest rates for 30 years, while an adjustable-rate mortgage (ARM) provides a fixed rate for the first five to seven years.
- ARMs make sense for buyers planning to be in the house for a short period of time. Because ARMs offer a lower initial rate, but will grow exponentially in the years ahead, they aren’t the best bet for long-term, financially stable buyers.
Determine the Length of Your Loan:
- Ideally, a 15-year mortgage is a best bet for those buyers who can swing it. Actually, a cash purchase is fantastic (oh how I love the cash buyer!) but, alas, most of us are not floating in dough.
- A 15-year mortgage offers lower interest rates, but a higher monthly mortgage. Still, at the end of those 15 years, you will have paid significantly less in interest than those under a 30-year loan.
- A 30-year loan, the more typical choice for first-time or younger buyers, gives homeowners a little more financial freedom on a regular basis. For example, if your home carries a $300K mortgage, you pay approximately $1,520 per month on a loan with a 4.5 percent mortgage but a total of $248K in interest. That same mortgage with a 15-year term requires a payment of $2,182 per month, but the interest is significantly less at $93K. Either way, paying a bit more towards principle is always wise, if possible. And refinancing to a 15-year mortgage down the road is always an option. You know, once your money tree is in full bloom.
Lock It Down:
- Once you do land a great rate, lock it in. This can usually be handled at no cost or for a fee that is refunded at closing.
- Don’t play the guessing game when it comes to mortgage rates. Buyers trying to time their purchases to the fluctuating market usually wind up worse for the wear. And you’re going to need all your energy to pick out paint colors and get to work on those Thanksgiving decorations.
Thinking of Thanksgiving in a new home? Let’s talk turkey. Call me at 303-478-1201 or send me an email – firstname.lastname@example.org I’d love to help you!