Buyers • March 10, 2020

LET’S MAKE AN OFFER!

by Kristi Gibbs

The day has come when you have found your one and only. Maybe not your true love of the human variety, but you did find a home you love. Now what?! Here is some information you need to know as you move forward with writing an offer.

Full legal name:

You will sign purchase agreements for your home the way you typically sign your name legally unless you are buying the home in another name, such as an LLC. If you are applying for a loan, you will sign purchase agreement documents the same way you sign your loan application documents.

Offer price:

What price do you want to offer for the home? Let’s have a discussion about the sale to list price in the neighborhood if we haven’t already. We will discuss whether you should expect to pay below asking price, asking price, or above asking price based on today’s market. I will email you comps to review and give you my opinion as to what the home is worth. * Typically there is some negotiating back and forth. You need to decide how much you’re willing to pay for the home and what your walk away price is.

Earnest money:

Typically, we offer 1% of the purchase price. There are some circumstances that warrant offering more earnest money and I will let you know if I recommend it for your purchase to make your offer more appealing. The earnest check can be a personal check or cashier’s check made payable to the listing brokerage. We specify the due date for this in the purchase agreement and it’s typically due in a few business days after offer acceptance.

Consider the earnest money as part of your down payment. If you’re planning to pay $30,000 for a down payment and you’re paying $3,000 in total earnest money then at closing you would owe an additional $27,000 for the remainder of the down payment.

The earnest money is not something you get back if you walk away from a purchase due to a change of heart. That money is your way of demonstrating to a seller you are serious about closing on the purchase of their property. Things can come up during the inspection process that lead to a mutual release and, depending on how that process goes will depend on whether or not you are be entitled to a refund of earnest money. I always tell buyers that money is gone once they write the check so that they are only making offers on homes they are serious about buying.

Method of payment:

I will need to note your method of payment in the offer. We will need to know what percent of the purchase price you are borrowing and the length of the loan. If paying cash, I will need to provide proof of funds to the seller within 24 hrs of making an offer and if you are going to have an appraisal.

Closing cost credits:

Do you want to ask the sellers to pay any of your closing costs? Generally the sellers pay their closing costs and the buyers pay their own closings costs, however, we can ask the sellers to pay some of your closing costs on top of theirs, if needed.

Closing date:

We often see closing timeframes of around 45 days if a buyer is getting a loan and 30 or less days for cash closings. Closings take place during the weekday from 9 AM – 4 PM at a title company. They take approximately one hour unless you are paying cash and then it will be closer to 30/45 min.

You can ask for a longer closing date if that is what works best for you. Keep in mind you can typically lock your interest rate for only up to 60 days. If you want to close in less than 30 days and you are getting a loan, you would need to let me know right away and I would help direct you to lenders who can make that happen.

If you’re not getting a loan and are paying 100% cash you can close as quickly as 14 days. Especially if there will not be an inspection or appraisal. The title company essentially needs enough time to get a title policy and have the closing scheduled.

Possession:

It is not uncommon for sellers to ask for a few extra days of possession after closing to get moved out of the home. So don’t be surprised if a seller counters with this request. I’ve had sellers with months of extra possession and, often, we note in our listings when the earliest is that a buyer could get possession if the seller has a specific timeframe. For example, it is not uncommon for sellers to want to stay in their home until the end of the school year and move over the summer.

Inspection:

You can either completely waive all inspections, reserve the right to have an inspection, or buy the home “as-is.” More often than not, buyers reserve the right to have an inspection. We often ask for 15 days to both complete the inspection and provide a response to the seller. We also ask for additional days, if needed, to further examine any issues that come up in the initial inspection. I recommend reading the inspection portion of the contract more than once to make sure you thoroughly understand what a defect is according to IN law.

Home warranty:

Do you want to ask the seller to provide a home warranty on the property? They are $500 and here is a link to more information on an HSA home warranty: https://www.onlinehsa.com/. Home warranties are great for first time homebuyers, especially if the home is older. This can provide some peace of mind that there will be some financial help with bigger replacements/repairs in that first year of homeownership.

Contingencies:

Any other contingencies we need to be aware of? Do you need to sell your current home before you can buy?

While negotiations sometimes go quickly, it can also take several days of going back and forth. Every seller is different and some people can make decisions quickly whereas others need time to think things through. Patience is key once you submit an offer and start to work through negotiations. Cool, calm, and collected is my daily mantra.

Keep Calm & Real Estate On!

Uncategorized • February 26, 2020

MULTIPLE OFFERS – HIGHEST & BEST

by Kristi Gibbs

What is a highest and best offer?

When a seller receives multiple offers on their property, they typically ask all interested buyers to submit a final offer by a certain time and date. The idea is that this is the highest amount the buyer is willing to pay with the best terms possible. Usually there is no additional negotiation other than perhaps asking the buyer to change a closing date so interested buyers should offer the maximum amount of money they are willing to pay for the property.

How do you put together the highest and best offer?

While you might think the seller just wants the highest price for their property, there are other considerations that factor into which offer is the best for them. Here are some of those considerations and strategies that can help you secure the home you want:

Have your real estate team on the same page to ensure a smooth transaction. You don’t want to find out that you can’t qualify for the amount of money you’re offering if you go above the list price, so keep your lender in the loop as well as anyone else involved.
If you need a mortgage, make sure you have an up-to-date pre-approval which should be submitted with your offer. Also, you need to be comfortable with the offer you’re putting in so ask your lender about the payment difference if you are increasing your offer.
A typical closing timeframe for a loan would be around 45 days and 30 or less for cash purchases. Unless the sellers have a specific closing date in mind, try not to ask for anything out of the ordinary in terms of closing. Make sure your Realtor knows if the seller wants post-closing possession and add that to your offer to make it more attractive.
Sellers want to work with a buyer who they think will be easy to work with. Talk with your Realtor and come up with reasonable requests. For instance, I don’t suggest asking for a home warranty if you’re in a multiple offer situation or closing costs if you don’t absolutely have to have those. The cleaner the offer, the better.
Consider making an “As Is” offer. An “As Is” offer means you do an inspection, but won’t ask the sellers to make any repairs. You are agreeing to buy the property as it is. After the inspection you can still choose to walk away if major defects were revealed that were not previously disclosed, but you won’t ask the sellers to fix anything if you choose to move forward with the purchase. This gives the seller peace of mind that the deal will likely close because, often times, if a deal falls apart it’s over inspection items. This isn’t the best choice for all buyers.
Have your lender call the seller’s Realtor and assure them that you are a strong buyer and won’t have any issues qualifying for the loan.
Write a seller love letter telling the seller about yourself and why this is the perfect home for you.
Consider an escalation clause. This is something I go over with all my buyers who are in multiple offer situations and it is often used in our market. I have specific strategies when using this clause.
Additionally, when I have a cash buyer in a multiple offer situation there are some strategies to help make their offer the most appealing beyond the fact that there will not be a financing contingency.

Why do sellers ask for highest and best offers?

It gives all interested parties an equal opportunity to have their offers considered and it shows how committed a buyer really is. Plus, sellers want the most they can get for their home with the best terms and this gives sellers that opportunity. Some sellers list low with the hope they will get multiple offers so they secure a fairly clean offer that meets their criteria.

Buyers • Buyers & Sellers • Sellers • February 1, 2020

SOCIAL MEDIA PRIVACY SETTINGS

by Kristi Gibbs

Have you ever seen a friend or family member post on social media about their home purchase or sale? I certainly have! Sometimes those posts include information that could benefit one party to the transaction. This is why I strongly recommend changing your privacy settings on social platforms, especially Facebook, so only your friends can see your posts. Not public or friends of friends.

I often look up the other party to a transaction on social media. I try to get an idea of who they are and hope that I luck out by finding a post that says they found the home of their dreams. Great, now I know my seller has a stronger negotiating position because someone has declared to the world of Facebook that they love my listing. Maybe they posted they’ve moved out of state and posted a photo of that new home they just bought. Super, now I know you are likely quite motivated to sell.

Other agents are also looking you up on social media. By changing your settings, they won’t be able to see your personal information. Since you are working with me, you are not going to post about your home search or purchase until after the closing anyway. Correct?!

We are all learning with social media that revealing too much personal information can lead to unintended consequences. There is already an issue with wire fraud and people posing as real estate agents to trick buyers into wiring funds to the wrong account. Let’s not make it easier for them to track down buyers and sellers by blasting that on social media. Keep it under wraps and then, post closing, have at it!

Buyers • Buyers & Sellers • Sellers • January 29, 2020

SECURING YOUR HOME

by Kristi Gibbs

With all the new home technology available, there are a myriad of ways to secure your home. The more tech savvy are controlling everything from the HVAC system to interior room lights to a crock pot from a phones. Others are still using a wooden rod in the track of a sliding door so whatever your level of home security prowess, here are some simple tips/reminders:

1. Keep your yard mowed and well-maintained. While you might be out of town for a few weeks this summer, make sure your exterior doesn’t clearly advertise that.

2. Have dawn to dusk lights on your exterior. You can add a sensor to existing lights so they turn on and off automatically. If you want to take it one step further, buy a timer for an interior light or two giving the appearance someone is home.

3. Install an alarm system. Today’s alarm systems aren’t hardwired and difficult to install. In fact, many homeowners are installing systems themselves. There are systems you can own and take with you if you move. I personally use SimpliSafe.

4. Deadbolt doors and lock all windows. It is so easy to forget to do this so give doors and windows a check before you head out of town.

5. Be smart about what and when you post on social media. Don’t advertise to the public you are away on a week long vacation.

6. MY TOP TIP FOR BUYERS – RE-KEY YOUR NEW HOME. We don’t know how many copies of your keys are floating around town. A local locksmith like J&S Locksmith can get it done!

7. Have you ever heard of a Door Devil? This device prevents your door from being easily kicked-in and, according to Door Devil, installation is easy peasy. Doors are kicked in regardless of there being a security system or not, so just one more smart way to keep you and your valuables safe.

Pro tip: Don’t leave boxes from expensive purchases sitting outside without breaking them down – you don’t need to advertise what might be found in your house.

Uncategorized • December 14, 2019

ENERGY SAVING TIPS

by Kristi Gibbs

I challenge anyone reading this to turn off all unnecessary lights when leaving your home, keep doors/windows well-sealed, turn down your A/C or heat when away, and use LED light bulbs. Some simple steps and habits that can make a difference. If your kids are like mine, then know that I understand how challenging it can be to get them in the habit of just turning off their lights before heading off to school in the morning!

What are some ways you can conserve energy?

Use power strips for electronic devices. When you aren’t using them, turn off the power strip so they don’t continue to draw energy. Duke estimates you can save up to $24/year by making that simple change.
Install a programmable thermostat. This way you can set your home to not use so much energy when no one is home or while you sleep at night. Duke estimates this can save up to $162/year. Vectren has a link to a rebate up to $75 for this at: https://vectren.com/savings/in-home/rebates/thermostat.
Have a regular A/C and furnace inspection by an HVAC professional. Changing your filter and maintaining your units will not only extend the life of your units but Vectren estimates you can save 3-10% on your bill.
Install LED bulbs. You can save about $80 in energy costs over an LED’s lifetime as they use up to 90% less energy than standard bulbs. They are bright and last up to 15 times longer than standard bulbs. Duke offers discounts on LED lighting at Lowe’s. https://www.duke-energy.com/home/products/discounts-local-retail
Want to know specifically what you can improve in your home? Visit this site to see if you quality for a free home energy assessment: https://www.duke-energy.com/home/products/home-energy-house-call.

What about rebates?

Duke offers a number of rebates for HVAC, attic insulation, pool pumps, etc… Your contractor might already know about these rebates and can help you with them. For example you can save up to $525 on a qualifying new AC, heat pump, or geothermal heat pump. Be sure to check out what you might qualify for! https://www.duke-energy.com/home/products/smart-saver

Vectren also offers a number of rebates here: https://vectren.com/savings/in-home. Depending on whether your HVAC is electric or gas, for example, would determine which company’s site you look to for possible rebates. For example, they are offering up to a $300 rebate on new gas furnance that meet certain criteria as well as $25 towards furnace tuneups.

Let’s use less energy and save some $$$!

Buyers • Buyers & Sellers • Sellers • December 3, 2019

HOME MAINTENANCE TIPS BY SEASON

by Kristi Gibbs

Want to keep some preventable maintenance from haunting you during a home inspection? If you purchased a home in the last year, then you probably remember the inspection process and whether or not the home you bought had a slew of issues. Could any of those have been prevented by regular maintenance? I would suspect so and this is why I am encouraging good care of your home. It’s your biggest asset after all!

SPRING:

√ Deep cleaning – including wiping down baseboards & cleaning windows.
√ Check smoke detectors/carbon monoxide detectors & replace batteries
√ Service and clean your A/C system
√ Clean your disposal – put 1/2 cup baking soda down the drain followed by 1 cup of white vinegar. Plug drain and wait several minutes. Then flush with hot water.
√ Add window screens if you took them out over the winter.
√ If you have landscaping beds and want to prevent weed germination, this is the time to sprinkle on some Preen or other weed control.

SUMMER:

√ Carefully power wash siding, patios, walkways, and even driveways to remove build-up.
√ Clean/repair decks. Waterproof and/or re-stain or paint if needed.
√ Clean out dryer vent and any other exhaust vents exiting your home.
√ Clean aerators on faucets and shower heads. Protect sink aerator by covering with masking tape before using pliers to remove. Use a toothbrush carefully to clean without scratching.
√ Check all tile grout and caulking around sinks, tubs, etc… Repair as necessary.

FALL:

√ Clean gutters. I can not stress the importance of this enough!
√ While cleaning gutters, take a peek at the roof to see if there are any obvious issues.
√ Trim branches that overhang or are touching the roof/siding.
√ Have your furnace cleaned and serviced.
√ Winterize exterior faucets. Unhook your hoses before the first frost.
√ Have chimney cleaned.
√ Test sump pump. Make sure it’s plugged in and all looks good.
√ Service and clean furnace. Ask your HVAC professional to also take a look at your water heater, checking for any issues.

WINTER:

√ Remove window screens to store for the winter. Have any damaged screens repaired.
√ Vacuum refrigerator coils – it will run more efficiently!
√ Deep clean your basement. Look for signs of mold and water.
√ Check your crawlspace for water and mold. Easier said than done, so hire a foundation company or home inspector to inspect for you.
√ Check toilets to see if they are loose at the floor and tighten.
√ Reverse the direction of your ceiling fans to circulate the warm air – energy tip!

* Don’t forget to check your furnace filter and replace when necessary.

Buyers & Sellers • November 22, 2019

IS THE ZESTIMATE A GUESSTIMATE?

by Kristi Gibbs

If you’ve been home shopping or home stalking in the 21st century, then you’ve heard of the Zestimate. It has been credited for Zillow’s instant popularity and continues to generate buzz today. Is this magical estimate of value generated by algorithm’s the end all be all to your home value? No, it isn’t!

Is the Zestimate an appraisal?

I met a seller once who said to me that he knew the value of his home because he had an appraisal. When asked who conducted the appraisal, he said Zillow. Then I asked if he let the appraiser from Zillow come into his home, if they studied his neighborhood and studied the market. Of course that did not happen because your Zestimate is NOT an appraisal. Appraisers are licensed, they follow a code of ethics & conduct, and they often live in the market they serve. An algorithm can not duplicate their knowledge of an area or the condition of home.

Is the Zestimate accurate?

If a seller tells me they are thrilled with their Zestimate that sets off all sorts of alarms for me. It could be accurate, but I don’t know that there is any rhyme or reason to why it is way off or closer to market value at times. I sold a home this year that had a Zestimate nearly $75,000 less than my list price and it sold for list price. That particular Zestimate also showed that in the previous 30 days the home value had decreased by $11,000. If I had put ANY stock in that estimate, my seller’s would have sorely lost out on a lot of cash. I also see Zestimate ranges of over $100,000!!!! So they are saying a home could be worth between $300,000-$425,000. That really confuses buyers and sellers. It’s like predicting Indiana weather, it could be sunny or we could have arctic blasts followed by hail.

Why isn’t it accurate?

I think a computer program can generate a range in sale price with the right information, but to get to an actual listing price there is a more human element involved. There are some important considerations that are missing from the Zestimate. Does Zillow know which schools are really popular? Have they been in your home to see how it compares to others in your area? Do they know if your neighborhood is appreciating or depreciating? Do they know your backyard has the best sledding hill in the area? These are just a few of the things that I have to think about when listing a home for sale.

As a REALTOR, I know that sellers often perceive their home value to be more than the actual market value. There are things about homes that sellers might not care about, but the average buyer will as they compare your home to others. A 4 bed, 2.5 bath home might have similar specs on paper to another in the area, but the other home might have a new roof, new kitchen, larger bedrooms, and a better yard. So we have to account for that when determining price. Your home Zestimate might be similar, but market value will not be as similar.

If you want to know what your home is worth, call me. I will run comps and give you an idea of what you can expect for your home. The sale price of a home is different at any point in time because buyers are entering and exiting the market. Consider our area where we tend to have a very active Spring market, but when Winter hits we slow down a lot. Listings lag over the colder months and that does affect pricing.

Have fun checking out Zestimate’s and trying to guess how accurate they are, but don’t think too hard about them! When a home is pended the Zestimate seems to magically get closer to the list price, something I’ve noticed. I would assume Zillow wants to create data showing the accuracy of the Zestimate. If they were to take the last Zestimate posted before a home is a closed sale, then they could say their estimate was really close to sale price.

The most entertaining part of Zestimate’s for me is the constant increase and decrease in home values that sometimes are quite drastic over a short period of time. I also love that there are numbers like $386,509 listed as a Zestimate. Wowzers. I have never seen such inaccurate accuracy!

Happy Buying and Selling!

Buyers • November 18, 2019

SHOULD I TEST FOR RADON?

by Kristi Gibbs

I always recommend a radon test when purchasing a home. Your inspector will ask if you’d like to test for radon. Some homes have radon mitigation systems in place, but many don’t. It doesn’t hurt to test even if a system is in place in order to confirm that it’s doing its job. Homes on crawlspaces can test high for radon so it’s not just limited to homes with basements.

What is radon?

It is a colorless, odorless radioactive gas that is caused by a breakdown of uranium and moves up from the ground into the air we breathe. So it can exist anywhere and your greatest exposure is in your home where you spend most of your time. Testing is the only way to know your level of exposure.

Is it dangerous?

Yes, radon can cause cancer and it certainly impacts your indoor air quality. Radon is the number one cause of lung cancer among non-smokers. It is estimated to be responsible for 21,000 lung cancer deaths per year (2,900 of those individuals never smoked).

What level of radon is allowable by EPA standards?

If a home tests at 4 pCi/L (picocuries per liter) or higher then it is recommended that a radon mitigation system be installed. Those systems are very effective at lowering levels and several companies in the area are qualified to do that. The level of radon is an average over a period of time. Nearly 1 out of every 15 homes is estimated to have elevated radon levels.

How is it mitigated?

A vent pipe system with a fan is typically installed to pull radon from beneath the home and vent it outside. It doesn’t require any major changes to a home so it’s relatively easy to add. The cost can range between $900-$1,500 depending on how large the home is. Two systems might be required. I would consider inquiring about radon-resistant construction techniques if I were building or remodeling a home. In addition to a radon system, you can also have foundation cracks sealed or anything else sealed that might be letting the gas escape into the home. That will help make the system more effective.

As always, reach out to me with any further questions!

Buyers & Sellers • October 29, 2019

WORKING WITH A LENDER

by Kristi Gibbs

So you want to buy a home, but are you really ready to buy in this market? The number one thing that sellers fear is buyers walking away from the sale. Thus, sellers and their savvy realtors know that they need to see a solid letter from a lender OR proof of funds before they accept an offer. This means that once you, as a buyer, have interviewed realtors (yes, buyers can and should interview realtors) and selected one, the next step is going to be to meet with lenders if you are getting a loan.

There are a number of things that can happen when the time arrives for you to attain a pre-qualification or pre-approval letter from a lender.

1.) You call your realtor out of the blue to see a home you love and don’t have a letter yet.

2.) You saw a home with your realtor that you want to make an offer on, but don’t have a letter yet.

3.) You have your letter ready, but it’s for an amount different than what you are offering.

For scenarios, 1 and 2 your best and fastest way to get pre-qualified is to fill out an online application. That way you have a letter to submit with your offer. You are not obligated to use that lender, but it sure would’ve been easier if you met with and selected a lender prior to making an offer. It’s not uncommon for buyers to put the cart before the horse, so don’t despair. You are just making things a bit more hectic for yourself.

The third scenario means you are on top of things (gold star for you) and all we need to do is email your lender to update your letter reflecting the offer price. Why show your cards this early in the game? The point is to at least show the seller you can very likely afford what you are offering. There might be an instance where it makes sense to send a letter showing you are approved for more than the purchase price, like in a multiple offer situation. This will display your financial capacity is in excess of what will be required for that particular purchase.

Different lenders, the type of loan you are taking and your personal financial situation can all affect what is needed. These are commonly requested: Last year’s W2s, recent pay check stub, and the last two months of bank and/or investment account statements. For a credit report they will need your social security number, date of birth, and a 2 year residence history.

What if I am self-employed?

If self-employed then your lender will need personal tax returns for the last 2 years as well as business returns if you file those separately from your personal tax return.

Are you reading this and thinking that maybe you should connect with a lender? Reach out to me and I can help. Happy Borrowing!

Full legal name:

Offer price:

Earnest money:

Method of payment:

Closing cost credits:

Closing date:

Possession:

Home warranty:

Contingencies:

What is a highest and best offer?

How do you put together the highest and best offer?

Why do sellers ask for highest and best offers?

What are some ways you can conserve energy?

What about rebates?

SPRING:

SUMMER:

FALL:

WINTER:

Is the Zestimate an appraisal?

Is the Zestimate accurate?

Why isn’t it accurate?

Happy Buying and Selling!

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Can you show me homes that you don’t have listed?

If I want to see a home I just call the listing agent, correct?

If an agent shows me a home, does that make he/she my REALTOR if I want to purchase that home?

Will I have to pay your commission?

Can you show me your listing and sell me your listing?

Do I have to sign a buyer agreement?

What is radon?

Is it dangerous?

What level of radon is allowable by EPA standards?

How is it mitigated?

What if I am self-employed?