Buying a Home: Working with a Solution Finder vs Problem Solver

Are you a solution finder or a problem solver? That was the question I read in a post recently. It got me thinking. Aren’t they same thing? That’s probably what you’re thinking right now too. So let’s think about it some more…. It’s all about where you focus your energy. If you concentrate on a problem that needs solving, then that’s negative energy you’re wasting right there. You’re focusing on the wrong thing. If you concentrate solely on the solution, then it’s the reverse and it’s positive energy your spending to get a job done. So I ask you again, are they the same thing? Nope they’re not. And the difference is like night and day!

Personally, my philosophy has always been that there are no problems, just solutions. In fact it’s one of my standard comments that I roll out when clients are frustrated with something that’s going on in the transaction. My attitude is “don’t tell me it can’t be done.” I just don’t believe that and will turn over every stone to figure out how it can be done! Of course if the issue at hand is that you absolutely want to know where the property line is on a 70 year old property where the only records are lacking in detail and aerial photos inconclusive. Then the solution might be to pay $2,000.00 for a surveyor to come out and survey the property for you. It might not be the solution you want to hear, but it’s a solution nonetheless and the ball’s back in your court. Real case scenario of course and the buyer did end up continuing with the transaction and the deal closed – He knew I’d moved mountains to get the information that was important to him. He wasn’t happy with the solution, but he lived with it. (And no he did not pay $2,000.00 to have the property surveyed).

That was a hard one. An easier one was when the buyers after looking at about a dozen homes decided there really wasn’t anything out there for them. Well, there was that really nice home with the radon mitigation system as main focal point in the family room… Deal breaker? Yes. Solution – Get the sellers to move it. Easy, right? We just had to ask.

Who do you want to be around? Do you want to work with an agent who solves problems or one who finds solutions? If you’re looking for a home in the Iowa City area and you want to work with someone who gets the job done, call, text or email me – I’m here to help!

961 Boston Way, #15 Coralville, IA 52241 – SOLD

This unique townhouse is situated in the heart of Coralville, right around the corner from Coral Ridge Mall and The Coralville Strip. It’s also on the busline with an easy commute to the UI Hospitals and UIOWA.

You missed out on this one, but there are other homes in Coralville just waiting for their new owner… I would love to help you find the right one for you. Just call or text me anytime at 319-400-0268 or send me an email letting me know what you’re looking for and I’ll send you a complete list of homes meeting your criteria… Or if you’d like to search for homes right now you can do that here…

If you’re interested in having me help you sell your home for the best price in the shortest time please call me anytime at 319-400-0268 or click here to send me your contact details.

Rolling Out Text Message Marketing in Iowa City & Coralville

Always on a quest to find new and innovative ways to improve my services to buyers and sellers I came across a neat new tool to use to market a home that I’m rolling out today… Text message marketing has arrived in Iowa City and Coralville! How does it work? Well, actually exactly as you would expect it to. Take a look at the sign rider below. Anyone driving by the sign can text the number printed there and get information about the property delivered to their cell phone via text message. Information provided is the number of bedrooms and bathrooms, price and square footage plus a link to the property website at Home2Cell.com. Technology freak as I am I just couldn’t resist going for what I consider to be a totally cool solution to the flyer debate.

Next to pricing and staging your home the final important factor in getting your home sold is marketing. As hugely popular as text messaging is I think this is a great way of getting information about your home for sale to buyers out there

Thinking of selling your home in Iowa City or Coralville? Would you like to see one of these signs in your yard? This eye-catching Hawkeye yellow is hard to miss we’ve been told… Give me a call at 319-400-0268 or email me, I’d love the opportunity to work with you on the sale of your home in the Iowa City and Coralville area.

3 Good Reasons to get Pre-Approved Before Looking at Homes

Looking at homes is much more fun than going to a lender to get pre-approved. I don’t think anyone will disagree with me there! Perhaps that’s why so many buyers need to have a house in mind before they go see a lender. We all put off things we don’t like doing and since going to a lender seems to be right up there with a visit to the dentist it makes sense getting pre-approved would be one of those things you’d put off. So why is that such a bad idea you ask? Well, here I am with 3 good reasons why turning things around and getting pre-approved FIRST is a much better plan.

1. It’s frustrating and totally depressing for you to spend time looking at homes in a certain price range to later find out that you can only get pre-approved for a lesser amount. It takes all the fun out of the buying experience to have to adjust your expectations when you’ve already set your heart on something. Think about it. When you’re making other purchases, whether it’s groceries, luxury items or a holiday in the Caribbean you don’t go looking to buy without having a plan on how you’re going to pay for it, do you? So why would you do that when you’re buying a house? Generally speaking you won’t know how much a bank will loan you for a home until you visit with them. This is not something that is easily “guesstimated.”

2. Going back to the idea of “guesstimating.” Even if you have the best credit and know for sure you will get pre-approved easily, it’s still not a good idea to wait until you have a purchase agreement in hand before you see a lender. The purchase agreement has a financing contingency that requires that you have a loan commitment within 30 days of an accepted offer. That doesn’t give you a lot of time to be shopping for a lender. More than likely you will take the road of least resistance and will go to a bank that is most convenient to you at that moment in time. Will this mean you may not get the best deal? Possibly. Rates may not vary too much from lender to lender, but closing costs certainly do. Just this week I had one client pay $150 for closing costs “you can shop for.” I had another pay nearer $900. I’d say that’s reason enough right there to do your “loan shopping” ahead of time and not wait until you have a time crunch!

3. Last reason for the pre-approval is the one that usually gets top spot. This is where it shows your strength as a buyer. Particularly in the current market sellers are very nervous about accepting offers without having something in writing that shows that the buyer can pay the purchase price. I don’t think this needs too much explanation. Put yourself in the sellers shoes. The media tells us day in and day out it’s harder to get a loan these days. Would you want to accept an offer from someone who’s never spoken to a lender and has no idea how much house they can afford? My guess is probably not. That’s how sellers feel too. They don’t know you. It’s not personal. They just want to be sure you’re the “real deal” before they accept an offer.

Buying a home in the Iowa City area? Call, text or email me, whatever suits you best. I’m here to help!

Buying your first home?  I’m happy to provide all the information you need with a (free, no pressure) homebuyer consultation where we sit down and talk about the process.

Real Estate 101: Buyers Closing on a Home in the Iowa City Area

It’s the busiest time of year for closings on homes and I’m fielding lots of questions about the closing process. I figured it’s the perfect time to start a series Real Estate 101 where I’ll cover the frequently asked questions about the process of buying real estate in the Iowa City area.

The first thing is that there’s often some misunderstanding about the closing date and possession. I’ve had a couple of clients think they happen independently of one another. Here in the Iowa City area that is not the case. When you sign your loan documents at closing that’s also the time you can expect to get the keys/garage door opener to your new place. In signing the loan documents you provide funds to pay for the house and checks are distributed to the involved parties. At the same time sellers (or their agent) will have the documents transferring the property into your name. That’s the deal, you provide the funds, they transfer the property into your name. Fortunately none of this needs to be recorded before you can take possession of the house. The recording of the documents happens later and is not something you are a part of.

Can you start moving your stuff in before closing? Nope, that’s not an option. Both you and the seller need to have signed all the necessary paperwork before you can start moving your stuff in. Are there exceptions to this rule? Yes, if you and the seller write a clause into the contract or write an addendum to purchase prior to closing there are sometimes exceptions. There need to be extenuating circumstances though and it requires prior approval from both parties. That’s called early occupancy and a subject I’ll cover in a follow up post.

So now to maybe the biggest question I get: When will I know how much the check needs to be that I bring to closing? This is information that you will have when you get the preliminary copy of the HUD1 Settlement Statement from your bank prior to closing. Some banks are quicker than others providing a copy of the preliminary HUD 1. This can be for a variety of reasons. Sometimes they’re waiting on documentation from agents, other times they’re just plain busy. I’m usually all over this one and am definitely not in the “slow agent” category. I work with a lot of first time buyers (and sellers) who are pretty nervous about surprises at closing and I tend to push to get the HUD 1 as quickly as possible.

Of course, I should mention that you do have a GFE, Good Faith Estimate that you received when you applied for your loan. The costs of closing the loan will come very close to what you see in the GFE. Unfortunately the new improved GFE that came into force in January 2010 doesn’t include the down payment, so you’ll need to figure out that part yourself. (Not a particularly consumer friendly improvement if you ask me!)

These are a couple of the big questions I get about closing on a home. Am I missing something you’d like to see here? Leave a comment and I’ll remedy that!

You Have An Accepted Offer, Now What?

April 30 came and went. You picked out a home and have an accepted offer. Now what? Working with first time homebuyers this is a question that has come up quite a bit lately for me. What do you do now? Answer: You do nothing. You wait.

To qualify for the tax credit you need to CLOSE on the home. There is no way to claim the tax credit until that has happened. When it comes to filing for the credit, you have two options. You can re-file your tax return this year and include the form 5405, or you can file your tax return as usual in 2011 and claim the tax credit at that time. With either of these scenarios you will need to file manually and attach the HUD-1 Settlement Statement as proof that your purchased the home in the time frame required to be eligible for the tax credit.

This is information we’ve had since last year when the tax credit was extended. For anyone closing after April 30 the IRS site is not clear on what other documents it may need to prove that you had an accepted offer on April 30. At any rate you are not required to do anything right now. You still wait until after closing to claim the tax credit. You’ll probably need to add your signed and dated purchase agreement to the tax return, along with the HUD-1 Settlement Statement and the form 5405, but since the IRS hasn’t made that clear yet, that’s just an educated guess, not a fact.

Here’s a link to the IRS website with the most current information on claiming the tax credit on your tax return. I hope it will be updated in the coming weeks to give us more definitive information on what they will need as proof for the accepted offer.

An accepted offer is not enough – You need a solid deal by April 30!

Are you a first time home buyer still hoping to take advantage of the homebuyer tax credit? The deadline for an accepted offer is April 30…. Right now it may seem like you still have time, when really you have a whole lot less than you think. Let me just play devil’s advocate for a second…

Let’s say you put an offer on a home on April 28. What if the sellers are out of state? What if they need longer to respond and and April 30 comes and goes without you having and accepted offer? And even if you manage to swing that one, what about inspections? What if something turns up and you want to back out of the deal? What if radon comes in high? (Which it does a lot in Iowa). How motivated do you suppose the seller will be to negotiate repairs with you if he knows that if you back out of the deal you lose out on the home buyer tax credit?

Now you may think it will be possible to post date documents… Not recommended, since that would be fraud, but again let me play devil’s advocate and do just that…. How are you as a buyer helped by post dated documents? Not at all I would think. The seller won’t be any more motivated to negotiate with you on repairs. He’s already doing you a “favor” by signing off on a date that gets you a tax credit. In fact, he will probably expect you to pay full price for the home!

Remember, I’m playing devil’s advocate here. These are possible, not probable scenarios. I’m saying you’re taking a risk in leaving it until the last minute to make an offer. You don’t get a do over. You need a rock solid deal by April 30, not just an accepted offer… You want to be done with the negotiations and sitting back drinking tea waiting to close in June. (Albeit hopefully not June 30, because that would be taking a bit of a risk too….)

When Should You Ask The Seller For Closing Costs?

Should you ask the seller to pay closing costs when you make an offer on a home? That’s one of the most common questions I get asked when I meet with buyers for the first time. This is especially true with first time home buyers.

Most First Time Home Buyers are overwhelmed by the financial impact buying a home will have on their lifestyle. They know they have many other expenses to cover when they move and the thought of saving on the closing costs relieves some of the burden in their minds.

Firstly, let’s look at the facts: Seller paid closing costs are not really seller paid. They’re actually paid by you the buyer by rolling them into your loan. That may not make sense, so I will explain it a bit better: Imagine you make a full price offer on a home for $150,000 with a clause in there for $2000 for seller paid closing costs. If the seller goes along with that you will finance the home based on a purchase price of $150,000. With the so-called seller paid closing costs the seller’s bottom line is $148,000. Now, if you make an offer on that same home for $148,000 dollars, the seller’s bottom line is exactly the same. You on the other hand will be financing the home based on a purchase price of $148,000.

In this scenario the question is not so much whether you should ask the seller to pay closing costs, as to ask yourself whether you want to finance those costs into your loan, which will translate into a slightly higher mortgage payment every month. Making a lower offer without closing costs ultimately costs you less.

So when should you ask the seller to pay closing costs when you buy a home? Depending on your financial situation the so-called seller paid closing costs may be a good option for you. If you’re tight on cash or want to keep what you have for repairs or new appliances, then asking for closing costs may be the way to go.

Generally speaking it’s a good idea to talk it through with your Realtor to see what the best strategy is for you when it comes to making an offer. There used to be the perception that the offer looked higher when a buyer asked for closing costs. In a market where closing costs have become more standard and sellers are getting more used to seeing the closing cost option, the perception of a higher price is no longer there. Sellers are quick to note that closing costs or a lower price really have the same effect on their bottom line, so that tactic doesn’t work as well anymore.

Short disclaimer: Bear in mind that I help clients buy homes in the Iowa City real estate market. It may be different in your neck of the woods.

Relocation Checklist – Getting Organized Will Make Moving Day a Breeze

There are so many things to think about when you’re relocating it’s hard to keep them straight. Unlike your regular move, you have one single day when everything needs to come together. If you’re not properly organized that day can turn into a nightmare. If you are, then it will be just a moving day like any other. Since I’ve done this more than a few times I figured I’d put together a relocation checklist to help you get organized. Try it out. Print this out and check things off as you go along. You may be surprised on just how much smoother things go when moving day rolls around!

Six Weeks Prior To Moving

• Make a list of what you will be moving with you and what you will not. Be ruthless! Go through each room and decide what does not need to make the journey to your new home. A good rule of thumb is that if you didn’t know you had it, then chances are you don’t need it!
• Collect everything that’s not making the journey for a garage sale or charitable donation. Goodwill is always happy to see donations. Or if you want to make some money, then there’s eBay or Craigslist.  If you don’t have time or the inclination to do that, then just put your larger items in the yard with a “FREE” sign on them. You may be astounded how quickly they disappear.
• If you’re relocating for employment purposes, generally your moving company is selected for you. Otherwise, now is the time to comparison shop.
• Once you have made your selection, ask specific questions about the length of time for delivery. This can vary greatly depending on where you are in the US, (or Abroad).
• Find out exact form of payment at destination (cash, check). Again, if your relocation is employment related, this may be taken care of by the Employer. (Ask – this is not something you want to assume!)
• Get cartons and packing materials to start packing NOW. Even if you have packing services, there will be some things you want to pack yourself.

Four Weeks Prior To Moving

• Check with doctors and dentist for all family records and prescriptions and get children’s school records.
• If you have pets, check with your Vet for pet records and immunizations.
• Remove all jewelry and other valuables to a safe deposit box or other safe place to prevent loss during move.
• Contact local utility companies to set turn-off date. As a rule of thumb, it’s best if you turn off a day after you move and turn on the utilities at your new home the day before your move.
• Speak to your Real Estate Agent about turning on utilities in your new home. They may be able to help. Some utility companies require the Homeowner to call personally to arrange the utilities. In this case, your Agent will be able to provide you with the correct contact numbers.
• Have you loaned anything out lately? If so, now is the time ask to have it returned and of course return everything you have borrowed. (Including library books – you’re not going to have much time to read now anyway!)
• Drain all gas or oil in power mowers, boats, snowmobiles, etc. that are to be moved, to prevent fire in the moving truck. (While I’m on the subject of draining, this also includes draining espresso makers of water in winter to prevent freezing as I found out too late one time).
• Start using the groceries you have on your shelves and the frozen food in your freezer.
• Plan to use most of what you have over the next few weeks. Try to avoid buying more – only books equal cans when it comes to weight when moving!
• Give away or arrange for your own transportation of house plants. They’re not going to survive a 6-8 week trip in a moving truck!

One Week Prior To Moving

• Transfer or close checking and savings accounts.
• Have your car serviced for the trip.
• Fill out Post Office change of address forms.
• Check and make inventory of all furniture for dents and scratches. See to it that the moving company has this list and compare notes before they start to load the truck.
• Dispose of all combustibles and spray cans (spray cans can explode or burn).
• Pack a separate carton for cleaning materials and tools.
• Pack a special box with essentials you’ll need for the first few days at your destination and make sure this box is marked clearly ‘DO NOT MOVE’.
• Cancel any recurring services you may have. Newspapers, cleaning services, yard care etc.

Moving Day

• Plan to spend the entire day at the house. Last minute decisions must be made by you. Don’t leave until after the movers have gone.
• If you have children, arrange for them to stay at a friend’s house for the day.
• Make sure you have somewhere safe for your pets too.
• Make sure packers and/or driver are aware of fragile or precious items.
• When they’re done, make a final check of the entire house including all closets and shelves. You’d be surprised what people overlook when they’re running a tight schedule.
• Be sure to approve and sign Bill of Lading and double check with driver to make certain the moving company records show the proper delivery address for your new house. Verify the scheduled delivery date, too.
• Give the driver phone numbers for both point of departure and destination to contact you in case of a problem.
• Make sure you have the contact number for a real person when the truck is en route. You want to be able to contact someone in case of a problem and not talk to an automatic messaging system.
  

Good Luck and Happy Moving Day… Relocating to the Iowa City area? Give me a call. I’d love to help you find the right home for you!

Students with Parents as Co-signers May Qualify for the Homebuyer Tax Credit

Here in Iowa City it’s condo buying season and there are lots of students out buying homes with their parents as cosigners. A question that came up for me last week was whether or not these students can claim the homebuyer tax credit. You might expect the answer to that to be no… Well, hold your horses, here’s some info that shows it can go either way…

First of all, students who are claimed as a dependent by their parents will not qualify for the credit. HOWEVER, if they are not claimed as a dependent then it’s a whole different story…

This is an excerpt directly from the IRS site:

S2. Taxpayer A is a single first-time home buyer. Taxpayer B (parent) cosigns for A and does not qualify.

A. Yes. Taxpayer B is not a first-time homebuyer and cannot claim any portion of the credit, but A may claim the entire credit ($7,500 for purchase in 2008; $8,000 for purchase in 2009), if the home was purchased as Taxpayer A’s primary residence.

Here’s a link to the original document and some different scenarios.

Here are a few links to other posts I’ve written about the homebuyer tax credit:

How the Homebuyer Tax Credit Works

Expanded Homebuyer Tax Credit Now Includes “Repeat Buyers.”

You don’t need to sell your home to qualify for the $6500 repeat buyer tax credit

Phase out range on income limits for the homebuyer tax credit

Of course I’m not a tax adviser, so please don’t make major financial decisions based on this post. Contact a CPA if you’re uncertain about your filing status.