Unfinished homes present a great way to save a lot of money and get yourself a new home in the process. If you buy an unfinished home, you can keep your monthly mortgage payment low and also lower your initial investment.  Please note, that your real estate agent can help you located home builders willing to work with home purchasers interested in unfinished homes.

Normally, unfinished starter homes leave the upstairs area unfinished at the request of the buyer. The question here, is just how much equity and time do you want to put into an unfinished home. Sometimes a builder of an unfinished home may leave the sheet rock, floring, some framing, plumbing, trim work or electrical aspects unfinished. In some cases you may be able to buy a larger foundation size, to which you can easily add on at a later time and save money in the process.  However, before you make a purchase, you should always have an idea of how much money and time you will need to finish what needs to be finished.

If the home you are looking at has plans for a garage, you can save thousands if you decide not to go with the garage. On the other hand, if there is an extra room that was planned in the house, you can save just as much if you decide to forgo it. There are always ways that you can save money just by looking at the plans and eliminating or shrinking. 

There is something that you should always keep in mind. When builders acquire a piece of property that they plan to build a home on, they will do everything they can do make as much money as possible on their homes. You might be able to get them to agree to some of your ideas, although they probably won’t agree to all of them. Building homes can be a very profitable business - which is why most companies like to build their homes exactly as the plans call for.  But there is always room for negotiations.

When looking at unfinished homes, you also need to look at what banks are willing to accept. If you are planning to get a mortgage, most banks will need to be ensured that the home is up to local codes and in living condition. What this means, is that the living room, a bedroom, a bathroom and the kitchen must be finished at a minimum. If the home is lacking much in terms of being unfinished, most banks won’t give you a mortgage.  As to local codes, there should be completed inspections (if required) that prove that local codes have been met.

Most banks are also known to turn down unfinished home mortgages that they feel they will have trouble selling in the event that you default. In most cases, loan providers will require at a minimum for the entire downstairs area to be finished, along with most of the landscaping. Where the landscaping is concerned, you might be able to do some of it yourself and save money, although in most cases the home builder will need to do the smoothing of the topsoil and grass just to satisfy the bank. Realize that banks have strict requirements when it comes to unfinished homes, therefore, always check with your bank before you invest in an unfinished home.

As many of us already know, buying an unfinished home provides an excellent way to get your very own home at a lower price. Unfinished homes also allow potential buyers the chance to grow into their home along with their family. If you are interested in saving money, you should be sure to talk to the builder, to the agent and to the loan provider about your unfinished home plans. 

Your listing has expired and now you’re wondering what to do. The most important question you must ask is, "Where did I go wrong?". The answer is not usually within you, but with the agent you entrusted. Be prepared with the right information so you can interview your prospective real estate agent with confidence and assure you make the right choice this time.

With hundreds or even thousands of dollars at stake and weeks of time invested, don’t risk making the same mistake twice. Make sure your next agent is eminently qualified to sell your home. Don’t risk this decision out of obligation to a friend, family member or acquaintance. Your listing has expired and it’s easy to develop the identity of having a problem property in the market place. Therefore, it’s vital important to choose the right agent this time around.

Typically, most people will ask business associates, family or friends to recommend someone they’ve had good luck with... someone they can trust. Other sellers will watch neighborhood real estate signs to see who is listing many of the homes. Still others rely upon the reputation of the major national franchise companies. Then, of course, there’s always the yellow pages. All of these methods could prove to be disastrous!

Trust Your Instincts First!

When selecting an agent, he or she should be someone you feel good about, someone you’re willing to trust with one of the largest financial transactions you may ever make. This report is designed to empower you with the information necessary to make the right decision before you arrive at the place where you’re ready to sign on the dotted line again. Don’t allow the prospective agent to dictate your time table. If an agent is impatient you should immediately consider them suspect. Be careful.

Do Your Homework!

Ask For References From Past Sellers - Before you sign another listing agreement, check out references from past sellers. Flattering letters praising the agent’s work in a presentation book are a great start, but dig deeper. Ask for telephone numbers and names of the past three sellers and names of at least two current listings.

Know The Companies Reputation - Ask your business associates, family and friends about the company or agent and listen carefully for the very first thing they say. A company has a reputation in the community. Listen closely for it!

Call The Real Estate Commission - Call and ask about consumer complaints. Be sure and take note of the number and nature but don’t base your entire decision on this information. In a slow or declining market, agents will get more complaints because the sellers are frustrated that their home isn’t moving and they want someone to blame when it’s simply poor market conditions. Therefore, always allow your prospective agent to explain any complaints and if their response seems reasonable, take that into consideration. One other note: if an agent does a large number of transactions per year, they will naturally be exposed to the potential for more of these kinds of comments. If an agent isn’t doing anything, they obviously won’t generate a complaint.

Call The Better Business Bureau - See if the agent has had any bad dealings with his or her customers.

Ask For A Record Of The Agent’s Marketing Innovations - How are they dealing with the current market conditions? Is there a plan to beef up their advertising and marketing efforts to benefit the seller? Residential real estate has a long history of economic cycles. The market is either hot, improving, static or declining and with each cycle there has to be a plan to cope with the current market conditions.

Don’t Stop Asking!

Ask for a comparison chart of last year’s sales to this year’s sales. How is the agent and company doing? Ask for a history of the agent; how many companies have they been with and why did they change? If the reason is always money there may be something wrong! Be careful because if your agent changes, companies your listing belongs to the broker and you may get a new inexperienced agent as your replacement... this could be very costly!

Final Questions

Ask For A Detailed Marketing Plan – Request a step-by-step plan of the first four weeks, eight weeks and twelve weeks your home will be on the market. Make sure your agent is utilizing the latest innovative technologies for generating sales leads. There are now ways to literally generate leads 24 hours a day! These new marketing tools will help sell your home faster and for more money!

Define Planning Times - Establish a time with your agent to go over the marketing results within the first 15 days. Ask for all showings and feedback from other agents. Help the agent understand that any news is good news because it can help you make adjustments in your marketing plan.

If you follow these suggestions you’re sure to avoid the mistakes of the past. Make sure you’re dealing with a competent professional... making the right choice is worth thousands of dollars and a great sense of "peace of mind."

Who should sell their home (or other real estate) as a FSBO?  Who should not?

Who should buy a FOR SALE BY OWNER property, and who shouldn’t?

We all know that the real estate market in much of the USA is slow and has problems.  Many of us have real estate problems ourselves.  We need, or want, to sell our home or other property, but we’re aware that the market is problematic.  We wonder if we should employ a realtor even though we suspect that it will eat up all, or most, of our equity.  There’s even the possibility that there is no equity, and we’ll end up needing to “take money to the table” in order to close on the sale and pay the realtor.

Buyers among us want to get a good deal, and wonder if that’s to be had by dealing directly with a seller, or if it’d be safer to work through a realtor.

Sell As a FSBO?

In spite of all the problems, you’re a good candidate to sell as a FSBO if several things are true of you.  Let’s look at some of the more important ones.

If you have bought and sold several homes (or other property), understood the transactions, and had a pretty clear notion of who was doing what, and why, you may very well be better off to sell as a FSBO.

If you are accustomed to gathering and evaluating data, drawing logical conclusions from that data, and making decisions about which you feel competent (no excuses and blaming others if things don’t work as well as you anticipate), then a FSBO sale makes sense.

The more business experiences you have had, the more likely a FSBO sale will work well.

The more comfortable you are making decisions, and taking action, the more apt you are to be comfortable as a FSBO.

If you have the time, and some money, to use to market your property, and realize that both are needed to do the job and are willing to commit both to the effort, a FSBO sale is doable.

If all (or most) of these things are true, I’d go for it if I were you.

Who Should NOT Sell as a FSBO?

A first time seller probably shouldn’t sell as a FSBO. 

If you don’t know that FSBO means FOR SALE BY OWNER, you probably shouldn’t sell as one.

If you’ve had very few business experiences, you probably shouldn’t sell as a FSBO.

If you have a hard time making decisions, and hate to take personal responsibility, a FSBO sale is not for you.

If you have no time (and/or no money) to budget for a multi-media marketing program to sell your property, you’d probably be better off seeking the help of a good realtor.

This next one is akin to the one above and is a colliery to it 

If you don’t have enough imagination to come up with ideas for marketing your property, or for figuring out how to market it, good realtors are excellent at this, and you will probably want to turn your attention to finding one.  (Hint -- We have lots of marketing ideas on our website, but if that doesn’t get your mental juices flowing, a realtor is a good option.)

If you earn more money with your time than you could save by not employing a realtor, it makes sense to hire one.

Who Should BUY a FSBO Property?

This one is simple.  Virtually all the attributes that make for a good FSBO seller also make for a good FSBO buyer.

Instead of figuring out how to market, you need to be able to figure out how to evaluate price and have some negotiating skills (actually, sellers need this, too), but the truth is, the same skill-set tends to apply to BOTH sellers AND BUYERS.

And here’s the kicker.  A FSBO seller can afford to give you a better deal if he, or she, doesn’t have to pay a realtor.  Simple.  Obvious.  And true.

1.      Your monthly mortgage payment of principal, interest, taxes and insurance (PITI) should not exceed 25 to 28% of your monthly gross income.

2.      Your monthly housing cost (PITI) plus other long-term debt should not exceed 33 to 38% of your monthly gross income.  Specifically, most lenders will consider 4 key factors to determine your ability to qualify for a home loan:

Income – This first element can include not only your gross monthly income and secondary income (commissions, bonuses) but also your history of employment, stability of income, education, even potential for future earnings.

Credit History -- This encompasses your history of debt repayment, total outstanding debt, highest balance, and your highest monthly debt balance.

Assets – Your assets consist of cash on hand, savings and checking accounts, CDs, stocks, bonds or any other type of liquid asset.

Property – The home you are planning to purchase will be appraised to determine the market value. The estimated value must be sufficient to secure the loan. Lenders will loan you no more than a certain percentage (usually 95%) of this value.

Closing Costs
Keep in mind that in addition to your down payment, you will also be responsible for paying fees for the loan and closing costs. These will be required at the time of closing unless you qualify and choose to have these included in your financing.

• Closing Costs generally will range between 2 percent and 6 percent of the mortgage loan, depending on the loan and lender. You will be provided with a "Good Faith Estimate" of closing costs so you can know what to expect.
• "Points", which are one-time charges equal to one percent of your loan amount, may be required by your lender at closing.
• Your closing agent will charge a fee at the close of the sale.

If your home is valued at 200k or above staging is a good marketing strategy during a soft market. The reason, if your home is out there and is getting overlooked because the market is flooded with homes you may consider lowering the price. But, think again, before you decide to reduce the price consider staging your home.  A 200k home would have to be lowered 10% of the value. That is the standard in the industry. That translates to 20k. You can get a 1800 -2000 sq ft home staged for 10-12k (services usually paid at closing). 

You may wonder at the 10-12k price tag and think it is too much but so is a 10% price reduction. After considering the several advantages to home staging, you may decide to reconsider.

One of the best things about staged homes is that they sell in less time. This is great news for sellers, who won’t have to despair because their property stays too long on the market. Research has shown that staged homes sell nearly 40% faster than other homes on the market.  Once they are listed, they pretty much draw attention to themselves - resulting in a fast sale.

Staged homes also sell for more money. Homes that have sat on the market for a long period of time will normally get lower offers due to the fact that home buyers will begin to think there is something wrong with the home or because the buyer knows that the seller has waited and is probably willing to drop the price. 

Staging a home may include only the exterior of the house or the interior or both. A staged exterior will help to draw in the customer. When home buyers first arrive at a home that is up for sale, they instantly make up their mind whether they should get out and look around, or drive off. If the yard is staged with flowers, some well placed lawn furniture and the yard is manicured and properly taken care of, chances are that buyers will want to see more. If you entice your buyers by showing them how nice the home is outside, they will surely want to know what the home is like on the inside as well.

Once a buyer has stepped inside of the home, he will know within a matter of seconds whether or not he likes the home. To get the buyer’s attention, you’ll need to transform your home into a product that will appeal to potential buyers. Staging services are based on proven guidelines and techniques to help bring top dollar in the shortest time possible.  It is not uncommon for sellers to receive multiple offers above asking price for a staged home.

What do staging professionals do? Well they usually create a report and let you know what will help your home from both experience and knowledge. This can include rearranging furniture and or what is already in your home, recommending the removal of personal or unnecessary items, re-accessorizing or adding rental furniture, or scheduling any necessary subcontractors such as cleaning, painting, or landscape professionals.

A vacant house is the hardest house to sell! Staging makes the home look warm and welcoming and make buyers mentally move in.  Buyers love to see homes that are ready to move into - and not ready to be worked on.

Staged homes will also attract more real estate agents and get more advertising as well. If a real estate agent loves your home, he will want to show it off. If you stage your home, chances are that real estate agents will eat it up. When they do, they will advertise your home more than others, because they know it will sell faster. This way, you can benefit from a lot of exposure at absolutely no extra cost.

There’s no other way to look at it, other than staged homes sell! They attract more buyers, more real estate agents, and they give people the feeling of home. When you go out of your way to make the buyer feel that your home is his dream home, he will know it. Homes that aren’t staged may sell, but staged homes sell much faster and for more money. 

If you are not sure were to find a local staging professional do not hesitate to ask your real estate agent.  Chances are that most real estate agnets know and have worked with staging professionals. 

Finding the right real estate professional requires doing a little research and asking a few questions. You need to know everything about the selling process and the reatlor's marketing plans and strategy.   We have posted here the continuation of our article:

6.     How often will you hold open houses? Will they be public or by appointment only? - Simply putting a sign on your lawn and holding open houses every Sunday will not sell your home. Too frequently open houses make the property a target for low ball bidders. Look for an agent with a specific plan for each open house. The plan should be just one facet of a complete marketing plan.

7.     What listing price do you recommend and what is that price based on? - Pricing is the most critical step to selling your home. Take great care in choosing an agent with the knowledge to price your home effectively. Keep in mind the selling price should attract prospective buyers to your home, get you top dollar in the current market and reflect the condition of your home. Be realistic and avoid ‘yes agents’, who will say ‘yes’ to any request or price while your home languishes on the market. Lowball agents will try to talk you into an artificial price simply to sell as fast as possible.

8.      What does the listing agreement entail, what are the beginning and expiration dates, and what are the fee amounts I will be paying? - Have your agent go over every detail in the listing agreement with you until you understand it completely. Make sure the beginning and ending dates are on the agreement; a good standard for length is three months. Know exactly what fees you will be paying and remember that less is not always better. If the agent stands to make very little commission you can bet it will be reflected in the amount of time and effort that is spent marketing your home. If the agent reduces their commission to get the listing it may mean they intend to spend very little money promoting the property. The normal commission is between 5 and 7 percent.

9.     What disclosure laws apply to me and what do I need to be aware of? - Make sure your agent helps you with locating professional inspectors for the various mandatory home inspections required in your area. Create a home marketing file including a property fact sheet, a property transfer disclosure statement, pest control report, applicable C.C.& R’s , applicable study zones report, structural engineering report, property profile from the title company, plans for alterations or additions, and special equipment report for pools, spas, sprinklers and alarm systems. Your agent should be able to handle this for you.

10.     What types of things separate you from your competition and will you give me some feedback? - How effectively will they advertise? Do they have 24-hour advertising capability? Will all the leads be followed up on by your agent’s team or will they go to other agents who may have other listings they would prefer to show? Agents who are innovative and offer new methods of attracting home buyers will measurably outperform agents who rely on methods of the past. Marketing effectively in the 90’s and beyond requires progressive strategies that add value and service for both buyers and sellers!

If you would like more information on this article contact our real estate site or email us with your questions.