We are all watching HGTV. They make it look easy to take an old, run down house and turn it in to a shiny, new, renovated home most any buyer would love to purchase at a premium price.

This year, we’ve helped buy and sell several “fixer-uppers”. Here’s what we’ve found:

• it’s not as easy as it looks. There are more buyers (including investors) than sellers in todays market. You have to be creative in finding homes that are distressed and in need of repair. You must be diligent in searching the MLS listings, create relationships with REO agents, and possibly spend time on the court-house steps in order to find the right property. You will see many houses that are overpriced and will not make a profit for you in in the long run.

• Take your projected costs and add another 10%. You should be able to project your costs on your initial visit. How much is a basic kitchen re-do? How much is a high end kitchen? Do you need to paint the entire house? What does the roof look like? Are there signs of water stains (leaks) or termite damage? Meticulously go through the home from top to bottom in order to assess the repair costs. One home recently looked fine outside until we went to one side of the house. The siding was rotting underneath the fresh coat of paint (hiding this?). New hardi-plank siding was needed on the entire exterior. That could have been an additional $20,000 in costs we may not have anticipated. Any profits could be wiped out if you make a mistake in your projected costs.

• Look ahead at potential market conditions and if you are headed to a down cycle. What does a home sell for at the renovated cost in this neighborhood? Is it possible to “over” renovate a home? If most homes are selling in the high $200’s and you renovate where you need to sell in the mid $300’s… You will not recoup the investment. You may even lose money on the deal. Make sure you are looking at equivalent comps in order to make the best decisions on how to renovate. Time of year is important as well. Time is money and if you are listing after school starts, it may (or may not) take longer to sell the house.

• It’s not just “lipstick on a pig”. Buyers and their agents are savvy. They are going to be “wowed” buy the new flooring, paint, appliances, tile, etc. That does not mean you can leave an un-serviced 25 year old HVAC and no one will notice. They will see water leaks in the attic, they will question any “rodent” droppings or traps, and painted cabinets sometimes add charm, but other times they look old & out of place in a newly refurbished home. Make the home “pop”, but don’t neglect the systems.

• Your construction costs can make or break you. Are you getting the best deal from your suppliers? It pays ten fold to shop around. Look for the best prices on appliances, lumber, paint, etc. The more time you spend on cutting this cost, the better you will be on your bottom line number.

• What happens if you run into unexpected set backs? The porch seemed fine when you bought the house. Now you notice it’s leaning a little too much on one side. Do you have a structural problem? Do you need to hire an engineer to help you determine the cost of repair? You may sell a home “as is”, however your agent is required to disclose any major defects the home could possibly have.

• You’re under contract? Congrats! Now it must appraise. You’ve bought at a good price, you were mindful of your expenses during the renovation, and now you are under contract at a high price! If your buyer is getting a loan, the lender will require an appraisal. Make sure the comps are close to your list price. Be ready to show your renovation costs as well if you need to justify list price as well. Appraisers are very conservative in today’s market. Make sure you can back your price in order to get to the closing table.

• More possible expenses will crop up with the buyers inspection. You’ve done a great job and the renovation is a success! Your buyer will most likely hire a professional inspector to look over the house. There is no “perfect” home. They will come back with some repair requests or ask for a concession on the contract price. Keep this in mind and realize they will be looking specifically at electrical, the roof, the heating and cooling systems, and for signs of structural issues.

• More costs…. Do you get a survey or termite bond? We will usually have our pest control person look over the home during our very short due diligence prior to purchasing. Most of these homes are sold initially “as is”. You may be able to request the seller pay for a termite bond if there are signs of termites. If not, you will know up front there is an added cost of getting rid of termites and treating the infected areas before you list. Surveys are not always ordered when buying a house. In my opinion, if the current seller does not have a survey, you should add that as an expense to your reno cost. Having a survey not only gives you peace of mind on the property lines, it also shows a potential buyer that you’ve gone above and beyond in confirming the property lines for their new home.

• This is our formula on deciding how much to offer a potential flip. Everyone has his or her own way of looking at how to cost out a reno. We take the potential lowest contract price after the renovation, deduct the realtor fees, deduct the cost to renovate, and subtract our desired profit.  This gives us our offer price on a distressed property. Hopefully that is a number the seller will accept and we can start the flip!

• Oh yes- you’ll need cash and the ability to close in 10-14 days in order to be competitive on a good flip. There is so much competition for distressed homes, you need to stand out to a seller. Cash, a short due diligence (0-5 days), excess earnest money, confirm home is sold ‘as is”, and a quick close (no more than 14 days) will give you a leg up on the competition for the home.

Good luck! Call me if I can help!

Jill Rice- Atlanta Realtor®-

770.330.7477

jill.rice@me.com

Atlanta :: Gwinnett :: Sandy Springs :: Brookhaven :: Tucker :: Lake Lanier :: Norcross :: Peachtree Corners :: Cumming :: Roswell :: Suwanee :: Johns Creek :: Alpharetta :: Buford :: Dunwoody

The post Are you Flipping Crazy? Let’s flip a house together! first appeared on Jill Rice.

We all want to purchase real estate at a good and fair price. If we can get a great deal on a property, that’s even better. One way to get a really good deal is to purchase a short sale. A short sale basically means the owner of the property is selling it for less than their mortgage. The financial institution may or may not approve of this sale. Many times, the owner is already in default of the loan and the bank is willing to accept a lower payout. If a short sale is something you want to pursue, here’s what to anticipate.

1. A possible hostile seller or tenant living in the property: Why hostile? They are selling their property below value in order to walk away. The bank is in charge. The current owner may be struggling with other financial issues, may be close to bankruptcy, or may have other stresses you aren’t aware of. If tenant occupied, the seller may be forcing them to move from their current “home”. In either case, the listing agent may not be able to secure appointments to see the home at times that benefit the buyer. You have to be flexible and patient. There are even times when someone may buy a property unseen for this reason.
2. A property that is distressed and in poor shape: If someone is short selling their home, there’s a chance it’s not been taken care of. If a seller plans to walk away from their mortgage, they may also trash the home before leaving. If they have been unable to make their mortgage payments, its likely they have not had the money to keep their home updated and in good shape. You may encounter soiled carpet, nasty appliances, scrapes or holes in the walls, and even strange odors. Make sure you are allowed to have an inspection during your due diligence period.
3. A long wait from the bank to see if they will approve the final number: The bank will decide if they will accept your offer. Banks and large financial centers sometime move slow. There are committees and approval processes that can bog down the acceptance. You may feel you are getting close, only to have them delay the process again. In most cases, the closing process may take up to 180 days. Be prepared to wait.
4. Lots of paperwork provided to the bank: As in all mortgage processes, there’s quite a bit of paperwork. Both the buyer and seller will have to provide documents in order to make the process work. As a buyer, you must be diligent in providing what is asked of you. You are also at the mercy of the seller. They may delay the process if they do not provide requested documents in an urgent manner.
5. A long line of other buyers waiting to cash in: Cash is the preferred payout to the bank in a short sale situation. If you are providing cash, be prepared to show “proof of funds”. You can provide the account paperwork, but black out your account numbers on the statement. If getting a mortgage, it’s essential you are pre-approved for the loan. Even a pre-qualified letter only confirms you are “most likely” to be approved. The bank will want to know you are solid before moving into the short sale process. Be aware, there are some banks that require the listing to be “marketed” for a time period. This can include listing the property on the local multiple listing service and can also include putting the property up for auction. Even though your offer is on the table, the bank may or may not try to get higher offers. If auctioned, you may have to bid as well in order to save your spot.

Short sales are still out there. They are not as numerous as in past years, but they can be found. Your agent can work with local banks, set up a search through the local mls system, and scour the tax records for upcoming foreclosures.

Being an agent is a little like being a detective. The right one is always looking under every stone for their client. They are working outside the box and will search high & low to find properties for their client. We do just that at Windsor. Call me today. I would love to help! 770-330-7477 or jill.rice@me.com

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The post So, You Want to Purchase a Short Sale Property? first appeared on Jill Rice.

2016 is shaping up to be a big year if you want to sell your home.  Interest rates are still low and there are too few homes for sale. This is causing a feeding frenzy in some markets for  buyers.  Buyers are having a tough time standing out in this seller’s market.  Here are a few tips on finding a home and going under CONTRACT with the home of your choice:

1- Have a pre-qualified letter in hand from your preferred lender if you are getting a mortgage.  A lender can help you determine beforehand how much you’ll want to pay for a home.  Knowing this early helps you eliminate homes that are too expensive or even homes that are in a lower price range.  Be efficient.  Finalize this early!  Search in your sweet spot and no where else.

2-Hire a Realtor® as your buyers agent to assist you in finding these homes the day they come on the market (and sometimes even before they are listed). When she calls you with a possible home, you’ll need to see it soon.  We are seeing homes go under contract within hours of being listed.  You’ll need to make a fast decision if you think you’ve found a home in the right location.  Remember, you’ll ask for a due diligence period.  If something goes wrong, you will have several days to walk away from the contract if for some reason you no longer want the home.  As long as you are in your due diligence period, you will not loose any earnest money you’ve provided.

3- Make it a strong offer.  In a sellers market, submit your highest and best offer up front.

• Earnest Money: If you can offer additional earnest money, do this as well.
• Be flexible.  Ask your agent to find out if the sellers need to close quickly or may need some extra time in the home.  If your moving time frame is flexible, it may just be the reason you end up under contract.
• How strong is your financing contingency?  Cash is king.  If you are paying cash, you’ll most likely move to the front of the line.  Also, loans with a higher percentage of down payment are perceived as solid.  It shows you’ve saved for this purchase.
• Are you asking for any contingencies?  If you must sell your home before closing on your new home, the sellers may accept another offer that does not have this contingency?

There are so many options.  Your agent will walk you through the contract and can present you as a strong buyer.

4- Don’t be discouraged if you do not go under contract.  If you’ve made your strongest offer and it is competitive in the market, another buyer may have looked stronger.  If you are working with an agent that is on top of the market, she will know as soon as homes are listed, she will stay in touch with the agent for the sellers of homes you wanted but did not get, and she will be looking under every rock for your next home.

Finding a home in this market to buy can be stressful.  If you want assistance during this time, let me help!  My goal is to search endlessly for your home.  As a 25 year resident, I know the Atlanta market.  I’m also an Accredited Buyers Specialist aka.. ABR®.  This will be a fun and exciting adventure! I promise!  Call me at 770-330-7477 or email Jill.Rice@me.com

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The post Buyer Beware! first appeared on Jill Rice.

My goal in any transaction is that everyone feels like they have won at the end of the negotiation. While it doesn’t happen every time, more times than not our clients are amicable when they meet at the closing table.

Why is this important?  Here are a few reasons you’ll want your clients to “get along”.

1- Sellers may “leave” items at the home by mistake.  If it’s something of meaning, it is much easier to ask the happy buyers if they can retrieve the item.

2- Buyers may “find” switches or buttons and have no idea what they are used for.  If there is not a relationship with the seller, they may never know the use for that switch.

3- If the sellers mail is still coming to their previous address, a happy buyer will gladly forward the mail to the seller.

4- It can go both ways, but happy buyers and sellers do not trash talk about the deal with their neighbors.

5- Sellers who move out of town and come back, may invite the buyers + the listing and selling agent to dinner.  This is when you know it was a special deal!

And it can happen!  We enjoyed a special dinner with recent buyers, sellers, agents and spouses.  As an agent and representative of this most important transaction, it is satisfying and humbling to know we did our job!

Contact me if you are interested in buying or selling!

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The post Buyers and sellers CAN be friends after the deal! first appeared on Jill Rice.