If your offer is rejected, a little patience (and a backup offer) may pay off.
When there are more buyers than available homes in your area, real estate competition can get fierce. Chances are, not every offer you make will win the deal. But don’t despair. It’s possible to turn that next rejection into your dream home.
Here are seven reasons why your initial unaccepted offer may eventually close the deal.
1. A backup offer is a secret weapon.
You made your best offer, but it wasn’t strong enough to secure the home — maybe your competition offered more money, or their terms were slightly better. All is not lost. Ask the seller to accept your offer as a backup offer. There is no cost to you, yet you are in line to get the property if the deal goes sour.
2. It’s all so close, they can taste it.
Once a seller has an offer and it’s progressing, they are already psychologically moving from their home. They’re picturing closing day and the moving trucks in the driveway. If the deal abruptly comes to a screeching halt, the seller is much more willing to move forward with a backup offer just to keep that momentum going.
3. Your chances improve after the inspection.
I have been successful in backup situations where an inspection has uncovered more issues than the first buyer wants to deal with and the buyer walks away from the house. The good news for you is that those issues won’t go away. The seller may realize he or she can no longer play hardball and be more willing to accept your offer, rather than lose the deal a second time.
4. We’re in an era of tougher loan qualifications.
As loan qualifications become tighter and more scrutinized, some homebuyers may not qualifyand will have to back out of the deal. In this situation, you have the advantage of jumping in to save the day.
5. Set a 30-day time limit.
The longer the current transaction takes, the greater the chance the two parties are struggling to come to an agreement. Set an expiration date of 30 days for your backup offer. If the two parties are unable to close the deal, it may force the seller to settle for the next best thing before it’s too late.
6. Get first right of refusal.
Ask for a first-right-of-refusal clause in your backup offer. In this case, you’re not bound to purchase the property, but you’re first in line if the other deal falls through.
7. Get the terms of the backup in writing.
Once the seller agrees to accept your offer as backup, get a fully executed detailed agreement, in writing. Be sure they are obligated to sell to you within a certain period at the agreed-upon terms if the property becomes available.
Here’s one more bonus for the backup buyer.
Legally, the sellers have to disclose any problems the first-position buyers uncovered, even ones that made them bolt. As a result, you’ll know the property’s flaws in advance, saving you time and money on your own inspections.
Mortgage rates for 30-year fixed loans remained low this week, with the rate borrowers were quoted on Zillow Mortgages at 3.73 percent, unchanged from last week.
The 30-year fixed mortgage rate rose on Friday, then hovered around 3.76 percent before falling to Tuesday’s rate.
“Mortgage rates are almost unchanged from last week despite some volatility in response to mixed messages from incoming data and Fed commentary,” said Erin Lantz, vice president of mortgages at Zillow. “Despite a number of important speeches and data releases this week, expectations for the first Fed rate hike are firmly focused on December. We expect rates will remain roughly flat in the absence of exceptional global events.”
Just two years out of “CSI: NY,” Sela Ward has a hankering to live in the Big Apple — and that means putting her 14,000-square-foot gated estate in the swanky Bel-Air neighborhood of Los Angeles on the market. For $39.995 million.
Ward, who recently landed the role of the U.S. president in next year’s “Independence Day: Resurgence,” bought the sprawling mansion on eight acres in 2003 with her husband, Howard Sherman, so their children could spend more time in nature, she told the Wall Street Journal.
The couple revamped the seven-bedroom, 13-bath estate and intended to flip it, until Ward “greeted me at the door one day and said, ‘Let’s live here!'” Sherman told Traditional Home.
Gracious Southern and French style mix in the five-bedroom main home, where century-old heart pine floors complement reclaimed wood beams from Louisiana and Ward’s native Mississippi, plus antique doors and limestone counters from France.
The home includes a 30-seat theater, a library enveloped in cypress wood, and a small greenhouse off the indoor kitchen that Ward calls “l’orangerie.”
A wall of doors in the living room opens onto a terrace that overlooks a stream lined with rose bushes and Mexican lime trees.
The property encompasses an art studio and guesthouse as well as a vineyard, a covered footbridge and a 100-seat amphitheater.
Residents and guests have two choices for swimming: an infinity pool and a man-made pond with a sandy beach lit by tiki torches.
Even if you love where you live, if you own a home that you purchased from someone else, you’ve probably looked around your house before and wondered: “What was the builder thinking?”
But not everyone goes that route. Plenty of people pay to have their home custom-built. In other words, some homeowners are the builder — or at least, they’re the ones pulling the strings and making the hard decisions on how small or big their residence should be and what features it should have.
And if that’s what you’re doing, you don’t want to look around your house someday and wonder: “What was the builder thinking?”
So if you’re spending money on a custom home, keep these eight things in mind.
Have Details in Place Before You Start Building
That means not just knowing how the floor plan will look but knowing how the rooms will be designed, says Jonathan Macias, a real estate broker and the president of the Macias Realty Group in El Segundo, California.
“Designing a house seems easy, but the amount of choices out there can be overwhelming for many. What color tile, what size, what pattern, will it match with the walls, what cabinets will go with this, what about the faucet?” Macias says. “All of these questions could be just for one small bathroom.”
In other words, you don’t want to be agonizing about how a bathroom should look and holding up your contractors. Speaking of which …
Sure, you may have a lot of stuff and you might look longingly at mansions and want the same thing, but if that’s the route you want to take, then think long and hard about what you’re about to do. What may be right for you now may not be right for you in 10 years, or even next year.
“I meet potential clients in my office almost weekly who tell me, “We built a 6,000 square-foot home, but now we’re dying to downsize to something smaller. Most families don’t even need 5,000 square feet, and a home as small as 2,500 or 3,000 square feet won’t feel small if it’s designed properly, says Andy Stauffer, owner of Stauffer and Sons Construction, a homebuilder in Colorado Springs, Colorado.
“A larger house is just more expensive and harder to maintain and clean,” Stauffer says. “According to the National Association of Home Builders, a custom home in the USA costs an average of $105 per square foot to build. That means by eliminating even 500 square feet in a home that you don’t need, you’ll save over $50,000.”
Think About the Resale Value Now
Even if you never intend to sell your home and plan to pass it to descendants, assume that you might sell it someday, Stauffer says.
“It’s simply a fact of life. Most of us don’t know for sure where we’ll be in 10 or 15 years, as much as we’d like to think we do,” he says. “I recently spoke to a real estate agent who had some clients that built a five-story custom home. They loved it but when it was time to sell, they had to drop the price by tens of thousands of dollars and sell at a significant loss because nobody wanted to buy a five-story home and walk up and down the stairs all day long.”
So build your dream home, but don’t make it a nightmare for someone else, Stauffer advises: “Don’t go crazy.”
Keep Your Mortgage Within Reason
You can always add to your home later, creating the dream house when you can afford it, and build your realistic home now, suggests Joan Fradella, a family mediator in West Palm Beach, Florida.
When she built her home in 1998, she wanted to stick to keeping the mortgage balance low, and so Fradella was careful not to go, as Stauffer says, “crazy.” She was going to have a luxury kitchen and bathrooms built into her home, but she didn’t, settling for more modest layouts, reasoning that she could later.
“I also didn’t get the crown molding and French doors because I knew we could do that ourselves,” Fradella says. And, indeed, her mortgage remained reasonable.
Don’t Sacrifice All of Your Amenities
Looking back, Fradella feels it might not have been a terrible idea to have included some of those “extras,” provided her mortgage hadn’t been too much higher. Because as it turned out, she says, “Life happens, your kid starts to play hockey; [goes] to private school, then college.”
She still hasn’t added any upgrades, and she’s been living in her home for 18 years.
Yet, she stands by her advice. “You will be surprised how quickly a $200,000 home becomes $400,000 in upgrades,” she says.
Preventing your house from becoming an economical abyss means knowing what upgrades are “must haves,” says Brian Brunhofer, president of Meritus Custom Builders, a Chicago-area builder that specializes in custom homes. “For example, carpet can always be switched out to hardwood floors later, but a full basement is something you should decide on now,” he says.
Brunhofer also points out that lending now is relatively inexpensive. As long as you don’t go crazy, “it can be much more economic to stretch and plan for those features in your budget now,” he says.
Of course, it’s in every builder’s best interest if you do include those upgrades now, since that’s more money for the builder, but it doesn’t mean Brunhofer isn’t right.
Check In on the Work
Keep the surprises for holiday gifts and birthday presents. Don’t get sucked into the idea that it would be fun to have someone drive you up to your new house, while blindfolded, so you can have a surprise unveiling (as you may have seen on home improvement reality TV shows). Because you might wind up stuck with a big mortgage on a house you’re not thrilled with.
“Visit the site during construction,” advises Nicole Cannon, a residential architect based in Los Angeles. “Make sure things are matching your expectations and ask questions if they don’t. The worst option is to remain quiet and end up with something that you are unhappy with or have to pay to fix after the fact.”
Don’t Let Your Dream Home Cloud Your Reality
Let’s end this on admittedly a bit of a downer — to prevent you from having an unhappy ending when building your own home.
Cannon warns that having a house custom built can be an amazing experience, but it can also be a stressful time, and no matter what you might be thinking, “it will not solve all of life’s challenges,” she says. “I’ve had more than one client who thought that building a new home would bring their significant other closer, and a new home would solve their marriage problems. It’s tragic when a home is completed and goes on the market immediately due to divorce.”
Now that Jessica Chastain is settled into Leonard Bernstein’s former duplex across from Carnegie Hall, the actress is renting out her old place in Greenwich Village.
For $11,500 a month, her tenant will enjoy a renovated and furnished two-bedroom, two-bath apartment with an extravagantly appointed master bath, including a full-length soaking tub fit for a Golden Globe winner.
The first floor boasts high ceilings, an open chef’s kitchen with high-end appliances and a living room with a wood-burning fireplace.
Follow the wide, circular staircase to a skylit landing, a master bedroom with city views, a dressing area and a cedar walk-in closet.
It’s “the perfect place to call home without needing to bring anything more than your toothbrush and favorite clothing,” according to the listing by Chris Pomeroy of Halsted Property.
Mortgage rates for 30-year fixed loans fell this week, with the rate borrowers were quoted on Zillow Mortgages at 3.73 percent Tuesday, down two basis points from last week.
The 30-year fixed mortgage rate fell to 3.67 percent on Friday before rising to Tuesday’s rate.
“Mortgage rates fell last week to their lowest levels since early May after the Fed deferred its first rate hike yet again,” said Erin Lantz, vice president of mortgages at Zillow. “We expect rates to be mostly stable this week now that the uncertainty about the Fed’s decision has subsided.”
Additionally, the 15-year fixed mortgage rate was 2.89 percent. For 5/1 adjustable rate mortgages, the rate was 2.71 percent.
Check Zillow Mortgages for mortgage rate trends and up-to-the-minute mortgage rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.
A home energy audit might not be at the top of your to-do list, but if you’re getting ready to sell your home, here’s why you should make it a priority.
If you’ve ever been in the market to buy or sell a house, you’re probably familiar with a few key questions when it comes to utilities. Septic or sewer? Oil or gas? And how much will it cost to heat and cool this place?
The answers to those questions can affect the final offer because what buyers want to know is this: How much will this place really cost me? The monthly mortgage payment is one consideration, but ongoing maintenance and utility bills are also part of a smart consumer’s equation.
In other words, an energy-efficient house is an attractive house. (In fact, in some states, an energy audit is required before selling a home.)
Energy labels for homes exist — LEED (Leadership in Energy & Environmental Design) and Energy Star, for example — but you don’t need an official (and sometimes expensive) title to reap the benefits of efficiency. What you do need is an energy audit from a reputable provider who can measure your home’s performance. Is it drafty? How’s the HVAC? Is the insulation effective? Think of this as the equivalent of a miles-per-gallon rating for your home.
Once you know where to make cost-effective fixes, you can pinpoint the return on investment on those upgrades, large or small. Repairing caulking, say, or sealing a fireplace may be key to reducing your monthly energy bills. Alternatively, a bigger investment, such as replacing old windows, could cost more upfront but make a bigger impact on the value of your home overall.
3. Competitive advantage
A theoretical buyer looks at two similarly priced houses in the same neighborhood. House No. 1 has an energy bill of $1,000 per year. House No. 2 clocks in at $3,000. The math is simple: Over the course of 10 years, House No. 2 would cost $20,000 more. Which is more appealing to buyers and worth a higher sales price? Memo to sellers: Be House No. 1.
4. Increase purchasing power of potential buyers
It may sound wild, but energy-efficient homes can actually leverage a homebuyer’s purchasing power if they apply for an energy mortgage. These mortgages work in two ways: A homebuyer adds a sum — say $4,000 — to a mortgage loan to finance energy-efficient upgrades. Though the monthly payments are higher, they’re offset by the new energy savings. Or buyers may qualify for a bigger loan if they can show that lower energy costs offset what they’d spend on a higher monthly mortgage payment.
5. Boost your market value
According to the Residential Energy Services Network (RESNET), the market value of a home increases by $20 for every $1 decrease in annual energy costs. Another study showed that in California, the value of a home increased by 9 percent ($34,800 for the average home) if it had energy labeling.
6. Improve indoor environments
Increasingly, homebuyers are seeking out homes that tout indoor air quality and home emissions as amenities. Energy-efficient homes tend to get checks in these new must-have boxes. With a cleaner HVAC system, fewer allergens and pollutants enter the home; and an efficient house is less polluting. Plus, ultimately (whether you care about being green or not), homes that cool and heat rooms effectively are simply more comfortable.
Expect an energy audit to cost hundreds of dollars, not thousands. But if you can’t afford one, there are things you can do yourself.
There can be great joy in moving into your first apartment or your first home. You finally have space all to yourself. You can decorate how you want. You can spend your time how you want.
Sadly, that initial burst of joy is often deflated by the realization that you need a lot of little things when you move to a new place. For many people, that means an expensive shopping spree.
Instead, consider making your first stop the local secondhand store. Many of the items you need to set up an apartment or a home for the first time or in a new area can be found at a thrift shop, which means you’ll cut back on that big burst of spending that can really hurt your wallet.
Here are nine items to consider purchasing secondhand for your new place.
Silverware is a requirement for eating food at home without making a complete mess. Fortunately, most secondhand stores have a selection of silverware on hand. You might not have perfect matching silverware, but you’ll have more than enough for your needs at an inexpensive price.
Dishes are also a dining necessity. Again, it’s easy to find plenty of plates and bowls at a secondhand store for a pittance, though you may not find a matching set. Still, you’re far better off buying two or three partial sets for pennies than shelling out the money for a single matching set from a store.
Glassesand cups for consuming beverages are another household essential that’s perfect for a secondhand purchase. As with silverware and dishes, you’ll likely not find a matching set, but what you will find are many cups and glasses to fill your cupboards at an inexpensive price.
A toasteror toaster oven both perform the task of toasting bread, bagels, English muffins and other such items. A toaster oven goes further, making it easy to make grilled sandwiches and cook small items. Both can easily be found at secondhand stores in working order and can make for a valuable addition to your kitchen to help you with food preparation.
Lamps are simple items that are often found in abundance at secondhand stores. All varieties of lamps, from desk lamps and floor lamps to clip lamps and table lamps, can usually be found secondhand at a very reasonable price.
A dining table is an essential piece of furniture in most houses or apartments, as it provides a place to eat and share meals. You can find simple dining tables at secondhand stores, and they often come with simple, solid chairs. The key thing to remember is you can buy an inexpensive starter set, and then upgrade later when you have money to easily do so.
A side table is often a key part of a living room, providing a place to put a beverage, snack plate or remote controls as you watch TV, study or read a book. Side tables can be incredibly inexpensive. It’s easy to find one secondhand for well under $10.
A bed frame is a key piece of furniture for those who have moved beyond the “mattress on the floor” style of bedroom décor. Bed frames can be expensive if you purchase them at a furniture store, but there are often many varieties of metal and wooden bed frames you can find at secondhand stores if you shop around. It’s important to remember that bed frames are purely functional items meant to be covered with a mattress and other decorative materials, so don’t worry about beauty.
Décor might seem like an unusual item to buy secondhand, but it’s easy to find things such as picture frames and wall hangings in secondhand stores, particularly in more upscale neighborhoods. If you’re creative, you can find a variety of décor items at a very nice discount.
One final suggestion: Don’t buy certain types of furniture used unless it comes from a trusted source. Used furniture can be a source of bedbugs or other unwanted travelers that you simply don’t want in your home. Solid wood items are fine, but be wary of upholstered used furniture and used mattresses.
The thing to always remember when buying secondhand items is that they’re replaceable as time goes on. They can serve you for a long time if needed, but they simply provide an inexpensive and functional solution that can significantly trim the costs of setting up a new home.
Mortgage rates for 30-year fixed loans rose this week, with the current rate borrowers were quoted on Zillow Mortgages at 3.75 percent, up one basis point from last week.
The 30-year fixed rate hovered around 3.73 percent throughout the week before rising to the current rate Tuesday.
“Mortgage rates held steady last week,” said Erin Lantz, vice president of mortgages at Zillow. “We expect rates to remain calm leading up to Thursday’s Federal Open Market Committee statement as markets eagerly anticipate any signal or action from the Fed on interest rates.”
Grammy-winning singer and songwriter Norah Jones snapped up a breathtaking new home that is sure to be a place where lyrics are inspired. While Jones is notoriously private, records show the house was purchased in May for $6.25 million through an LLC tied to her name.
The home, located in Brooklyn’s Cobble Hill neighborhood, is a star in its own right: It served as the set for scenes featuring Julia Roberts’ characterin the 2010 movie adaptation of “Eat Pray Love.”
The unique structure originally was an 1840s firehouse and retains much of that charm, including a fire-engine red door.
Jones recently applied for a permit to convert the existing two-family structure into one larger living space for herself, her unidentified beau and her young son. There should be plenty of room: The main floor of the house alone is 2,125 square feet. Entertaining will pose no problem in this wide-open space with double-height ceilings.
The living spaces are cozy but spacious, making the most of the home’s architectural charm and views. And there are plenty of windows, which should please Jones, who once fought to have windows installed in a previous historic brownstone.
The house could make a powerful muse for Jones, as there is much to wax poetic about: 12-foot-wide plank floors, huge brick fireplaces, exposed beams and brick, a generous kitchen and a decidedly 19th-century flair. The home boasts a glassed-in greenhouse and private porch, terrace and perennial garden as well.