Can My Real Estate Agent Offer to Buy My Loft If There are No Offers?

26 Jun 2015 · by Virtual Results PubSub

Can My Real Estate Agent Offer to Buy My Home If There are No Offers?The short answer is “yes,” but know what you’re signing up for.

In a seller’s market it seems like most Lofts should sell — given enough time and exposure on the market. But there are some situations where a Loft MUST sell: the owners need to move for work or because of a job loss; or, the Loft was left in a will and proceeds need to be split among the inheritors; the sellers are experiencing divorce, or any number of other reasons a Loft needs to sell quickly.

With a quick sale required, sellers may be temped to go for an agent’s offer that sounds too good to be true: The agent will “buy your Loft if it doesn’t sell!”

According to Angie’s List, such offers are not scams. They are, in fact, marketing tactics that might work for you in your situation — a win-win — or, might be a really bad deal. Before signing on the bottom line, make certain you know what you’re agreeing to.

Loft sale guarantees

Real estate professionals may offer a variety of types of guarantees. Each has its own value to both the agent and the seller:

  • “If I don’t sell your Loft, I’ll buy it” — Often, this type of guarantee offer comes from agents that work with investors. An investor wants to buy a Loft either to rent or to sell at a profit. In this scenario, you should plan to part with a chunk of your equity. This program may work for you if you need to sell quickly but don’t need top dollar from your Loft, if you need to sell to settle an estate, or if you’ve found a new Loft at a substantial discount and just can’t afford the two mortgages at once. Just know that you will see less return on this type of sale. If your agent only sells under this program and not to the general public, you’ll end up with less in your pocket.
  • “If I don’t sell your Loft in X months, I’ll buy it” — When a program has time stipulations, it usually also has price stipulations. You’ll most likely be agreeing to a schedule of markdowns (monthly, bi-weekly or weekly) so that by the “I’ll buy it” date it reaches the price the agent will pay for it.
  • “We guarantee you X% of the value” — In this approach, the agent offers a specific discounted price if your Loft doesn’t sell. Often, this is about 90% of its fair market value, plus fees and commissions.

The bottom line

Before you agree to any Loft sale guarantee plan, know that if the agent does not sell your Loft outright and the plan goes into effect you’ll be accepting far less for your Loft than on the open market. While this seems like a lose-lose for the typical Loft seller, it can be a win-win if the sale is urgent or the sellers have extenuating circumstances.

The best scenario

When selling your Loft, the best scenario is to work with a real estate professional that knows the Loft’s market, can advise you on the best way to prepare your Loft and create curb appeal, and offers all marketing resources (online, offline, print, local, signage, MLS, etc.).




Disappointing Appraisal?

19 Jun 2015 · by Virtual Results PubSub

Disappointing Appraisal

You’ve found the perfect Loft at the perfect price and made an offer that the sellers accepted. But, the appraisal came back lower than your offer.

BUMMER!

What do you do now?

Any Loft financed through a bank or mortgage lender requires an appraisal to protect them against originating a loan is upside-down (the loan is greater than the collateral).

There are many reasons that an appraisal comes back lower than the Loft price. The comparable houses used in the appraisal may not actually apply to the property you’re hoping to buy. For example, if the Loft you’ve put an offer on is semi-rural or rural, the comparable Lofts may not have as much land, or may have land but not as much house, or fewer outbuildings. In residential neighborhoods, the Loft you wish to buy may have upgrades that none of its neighbors currently have. Often, there are no other recent sales in the same neighborhood to compare to, so the comparables are from other neighborhoods that may not have the same quality of life or amenities as the neighborhood you’re hoping to buy into. Sometimes, the Loft is subject to a bidding war that drives the price higher than its actual market or appraised value.

Traditional banks and mortgage lenders offer mortgages for a percentage of the appraised value, not the sales price or the offer you’ve made. If the appraisal is less than the agreed upon offer you may need to come up with more cash, but sometimes there are other options:

Get a second appraisal. Yes, you can ask for a second appraisal from another qualified appraiser. Of course, you’ll have to pay for it, but it’s a small price to pay for getting the house of your dreams. Just know that the lender doesn’t have to accept the second appraisal … it’s value may be in appealing the first appraisal.

Appeal the appraisal. On the other hand, you can appeal the appraisal with the original appraiser. Review the appraisal carefully. Sometimes things get missed. Sometimes the comparables don’t really compare. Sometimes the appraiser doesn’t have all the information. Give as much information to the appraiser as you can. In recent markets, short sales and foreclosures of similar properties might skew the comparable data too.

Review the appraisal contingency clause. A contingency clause means that if the appraisal comes in lower than expected, you can renegotiate with the seller. Of course, they are not obligated to use the appraised value, but they may be willing to cover closing costs or other expenses so that you make the purchase. Sometimes the real estate agent(s) will take a lower commission to compensate for the difference.

You can agree to pay the difference, but you are betting on the price of real estate increasing, so you really wouldn’t want to do this unless this is your absolute dream Loft.

The best way not to have a disappointing appraisal is to work with a real estate professional that knows the market well and can advise you of fair market values ahead of your making an offer.




Easy Update: Chalky Painted Kitchen Cabinets

12 Jun 2015 · by Virtual Results PubSub

Chalky Painted Kitchen CabinetsIf you’re hesitant to purchase an older Loft because you don’t love the kitchen or bathroom cabinets and the idea of having to sand all of that wood makes you cringe, fear not … chalk paint to the rescue.

You haven’t heard of chalk paint? Well, here’s the scoop:

The original “chalk paint” (a trademarked name of the paint developed by Annie Sloan) allowed furniture restorers to create the shabby chic look on reclaimed painted furniture. The paint leaves a chalky finish (hence the name) until application of a wax finish and buffing.

With the development of specialty chalk paint mixtures, chalk paint allows for refinishing cabinets without sanding or priming. In fact, the technique used with chalk paint simply calls for brushing the paint on a clean surface, with a high quality chalk paintbrush, then finishing with a specialty wax to set the paint and add a glow to the cabinets.

Devotees of the process swear by it. To try the process with the original Annie Sloan Chalk Paint (ASCP), you’ll find step by step instructions in blog posts like this one and even on YouTube. Various finishes from weathered and distressed to smooth require simple variations to the basic process.

The most common negative heard about ASCP is the cost. At nearly $40 for a quart of paint, critics say they achieve the same look for less using other brands and even their own mixtures.

Other similar brands include CeCe Caldwell’s paints. These non-toxic, natural mineral paint products offer an eco-friendly alternative to other paint finishes. Being health-friendly makes these paints safe to use around children or family members with respiratory problems.

Websters offers a chalky paint powder to add to any brand of latex paint. They offer a variety of video tutorials to achieve different techniques, accents, layering options and even a process for painting on metal. Big-box DIY stores offer paints that give a chalky finish and are much less expensive than the designer brands, although professional furniture refinishers claim a variety of success levels with these. Two of these include Valspar Chalky Paint (available at Lowes) and Americana Décor (from The Loft Depot).

Very brave Do-It-Yourself-ers may choose to create their own chalky paint recipes using latex paint mixed with plaster of Paris (powdered gypsum) and/or calcium carbonate or sanded grout. You’ll find many different recipes, so only go this route if you have time to try different options before you tear your kitchen apart.

If you’re planning to sell your Loft and worry that your outdated kitchen might hinder a sale, the chalk paint methods provide a smooth finish and instant update to any kitchen.




When to DIY and When to Hire a Contractor

5 Jun 2015 · by Virtual Results PubSub

When to DIY and When to Hire a Contractor

Whether you’re preparing your Loft to sell, or you’ve just moved into your Loft and want to tackle some of the changes you have in mind to make it your own … knowing which items to do your self and which need a professional licensed contractor can save you from costly mistakes.

If you are really handy, tacking projects in your Loft may be right up your alley. If you spend lot of time watching Loft-makeover reruns on cable and envision creating a fabulous transformation all on your own … remember that there are always professionals (designers, craftsmen, tradesmen and carpenters) watching over (and correcting) the process. Doing-it-yourself (DIY) when the stakes are high (such as when selling your Loft, rewiring electrical or knocking out a wall) might give you a bigger headache than you want.

Here’s a basic list of what you might tackle yourself and which items definitely need that experienced touch.

  • Is it doable? Painting walls, resurfacing or refinishing cabinets, hanging drapery rods, even changing light fixtures is easily doable if you have basic skills. If you’re looking at scraping that popcorn off your ceiling, however, you need to check with your local building authorities to see if yours might have asbestos. Lofts built before the laws changed in the mid-70s may or may not have asbestos ceilings that require special (and often expensive) removal.
  • Is it safe? You may have the skills to change light fixtures, but if they are located in the peak of a vaulted ceiling over an open staircase and require artful scaffolding to reach … you might need a professional with the correct equipment. If you do tackle a project, be sure to have all required safety gear including goggles, gloves and the like.
  • Is it prudent? Many plumbing tasks—changing out a faucet, for example—are perfect options for a budding DIY-er. Moving pipes in the walls, installing shower pans and other projects that could cost you plenty if they created a leak inside your walls, might just end up being the proverbial Money Pit. When you hire a skilled contractor to do the work, make certain he is licensed, bonded and insured. That way, if a leak forms later and your tub falls through the floor, you’re covered. A seasoned professional should handle concrete work of any type since the chance for something to go wrong is quite high, but if you want to tile your bathroom floor … take it on.

Be prepared

Before you start a DIY project for the first time, check with your local big box stores to see if they offer classes. The tools, glues, mortars and other materials your grandpa or dad used may have changed over the years, so be sure to ask professionals about drying times, set speed, the need to use undercoats or primers and anything else you can think of before you start.

When making changes before a Loft sale, check with your real estate professional too … some changes may be unnecessary and others could actually lower the price buyers are willing to pay for your Loft.

 


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