5 Ways to Save on Your House Sale

Save Money on Your House Sale

With the sales price being so large, few sellers stop to think about ways to minimize the costs of selling their home. Knowing, monitoring and controlling the costs during the escrow process is key to saving thousands of dollars and to receiving larger proceeds from the transaction. Here are costs to understand:

  1. One of the largest costs is commissions paid to the real estate agents. Commissions vary from 5%-7% of the sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for with an agent. With so much riding on the selling price, a real estate agent should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table, you will see a lower sales price.
  2. With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.
  3. Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction – and charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating and sharing the cost of these fees with the buyer for your home.
  4. In any real estate transaction, a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers are requested to pick up the cost of a Home Warranty for the buyer. However, the cost is negotiable.
  5. Are you in an area where 1st time home buyers are known to be moving? If so, you may want to prepare yourself for requests to contribute to the buyer’s loan costs. These contributions are generally up to 3% of purchase price or more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sale of your home? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com.

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Trusted Counsel — Benefits of Using a Real Estate Agent

Buying a home is not like buying a TV, a couch, or a car. There are no returns, no money-back guarantees and no extended warranties. In most situations, you won’t be able to change your mind and sell your new home and break even – at least for 3-5 years. Instead, the purchase of a home is a rather important long-term decision. Still, some buyers of Phoenix Arizona Homes ask the question: Do I need a real estate agent to help? Here are a few questions to ask before you make a great home-buying decision:

  • Planning for the Purchase – How much should I put down? Who can help me with financing? How long is a typical escrow period? Will my close of escrow change if I buy a short sale or if I build a home? How long is the inspection period? How do I build my negotiating power before I write a contract?
  • Knowledge of the Local Market – Searching the Phoenix MLS for Phoenix Homes for Sale is just part of the process. Equally important is understanding the Local Market. What are the local schools like? Are we near a superfund site? What are comparable homes recently sold? Who can help me paint, install carpet or make other repairs?
  • Finding That Special Home – Where can I find that perfect floor plan? Are there homes available that are not in HOAs? We really would like a diving pool, not a play pool, is that possible? Are there homes that allow horse privileges?
  • Troubleshooting Challenges That Arise – What happens when the seller needs a new roof? We love the home and our appraisal came in low—what’s next? The seller is a bank and is not going to fix the holes in the wall, should we cancel?
  • What Are the Best Deals in Town? – Is this home a good deal? What are typical costs for real estate transactions in the Phoenix Real Estate market? A great real estate agent knows what a good real estate transaction is for their market. Knowing the market is a key to knowing what kind of home a buyer may be able to purchase and what fees are typical. A good agent also knows where to find the best properties and floor plans.

Are you ready to get started finding that special home? Contact us at www.ThompsonGroupAZ.com or 602-753-0177 today!

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Selling for Top Dollar – Contract Strategy

Real Estate ContractThe day is here! You need to sell your home. The next steps are to find a real estate agent familiar with your neighborhood, put your home on the market, and negotiate a BIG sales price. You might not have seen the latest Arizona purchase contract. Filled with 10 pages of legal jargon and multiple addendums, the lack of understanding of the Arizona purchase contract is an easy way to give away thousands of dollars even though you may sell your home for Big $$$.  Here a few items to watch for that can affect your bottom line:

  • Buyer Loan Costs. Many buyers need help with the purchase cost and like to write offers asking for the seller to pay their loan costs. And if the overall contract sales price is right, paying the buyer loan costs might be well worth while. Generally, the request is made as 3% of sales price.  Initially that amount may not seem high. However, when considering a sales price of $200,000, 3% of sales price works out to be $6000 – not a small sum of money. Instead, consider offering a compromise: have the buyer pay only half of the loan costs or a set amount instead of a percentage of sales price.
  • HOA Transfer Fees. Did you speak with your home owners association (HOA) before listing your home? The amount your HOA will charge to transfer your home to a new buyer is great information to know. We have seen HOAs have charging in the range $500 – $2500 to transfer the property. With HOA transfer fees being a negotiable item, a seller may be able to pass this cost on to a buyer.
  • Home Warranty Costs. As a general rule, buyers of for most Arizona homes expect sellers to pick up the cost of a Home Warranty. The Home Warranty will cover the buyer for one year in case some of the working components in the house break. The home warranty also protects the seller from being pursued by a buyer who feels that an A/C unit, hot water heater, or other expensive item died prematurely. A typical, basic Home Warranty plan will cover most items and can be obtained for under $450. But watch out – some buyers will ask for plans that can cost twice this amount.
  • Appraisal. Did you and your real estate agent have a conversation about what price the property is likely to be valued by an appraiser? Will your home appraise for the sales price on the contract?  Sellers may accept contracts for sales prices that have no chance of being supported by appraisal.  Mr. Seller, beware!  The appraiser may submit an appraisal for thousands less than the contracted sales price. If the seller forgot that the purchase contract is subject to the appraisal, the seller may have packed up the house and secured a new place to live.  When the appraisal comes in below sales price, the seller is generally between the proverbial rock and a hard place. They’re forced to decide: “Do I accept the new sales price and take a financial hit or do I cancel this contract and try to sell the home again?” Keeping in mind that most sellers are moving for significant life reasons such as job transfer, bigger home or changes in lifestyle, the seller generally must accept the financial hit or give up on the timelines and main reasons for moving.

In most cases a little upfront planning will help net more money for sellers when the contract arrives. Do you have more questions? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com

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Ways to Net More from Your House Sale

Penny Saved, Penny EarnedMy grandfather once taught me “A Penny Saved Is a Penny Earned.”  Nowhere is that more true than in the sale of a home — probably due to the number of pennies involved in the transaction. With sales price being such an important factor for a seller, few stop to think about ways to minimize the costs of selling their Phoenix Arizona Homes.  Monitoring and controlling the costs during the escrow process is key to saving thousands of dollars and to receiving larger net proceeds from the transaction. Here are some costs to keep your eye on…

One of the largest costs is commissions paid to the real estate agents. Commissions vary from 5%-7% of sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for in an agent. With so much riding on the selling price, a real estate agent should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table, you will see a lower sales price.

With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.

Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction but charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating/sharing the cost of these fees with the buyer for your home.

In any real estate transaction, a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers pick up the cost of a Home Warranty for the first year to protect the new buyer from unforeseen repairs.

Are you in an area where 1st time home buyers are known to be moving? If so, you may want to prepare yourself for requests to contribute to the buyer’s closing costs. These contributions are generally up to 3% of purchase price and could be more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sell of your home? Contact us at (602) 753-0177 or www.ThompsonGroupAZ.com.

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Foreclosure Averted

Earlier this year, my team and I were presented with a unique selling situation. One of our long time clients received a notice of foreclosure and had a limited time to sell their home – or lose it to the bank. Our home owner had equity in their home, but had been unable to make payments for several months. Further complications included the seller’s need to paint the home and replace the carpet.

The seller managed to personally paint the home and we found a carpet vendor to install carpet and who would wait for payment until close of escrow. Additionally, our proactive escrow officer got the seller accurate payoff numbers from their bank. When we found a buyer with solid financing, all the pieces were in place to close the transaction. I am proud to report that with the support of my staff and my vendors we were able to get this transaction complete and help the homeowner avoid foreclosure.

If you know of someone facing a similar situation, please let us know!

Sincerely,

Jamie Thompson

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Does Your Agent Understand Short Sales?

In most situations, a well-planned short sale of a home has a lot of advantages over foreclosures. Indeed, a close look at the Phoenix MLS shows that there are still plenty of short sales among all Phoenix Homes for Sale. However, a short sale is not to be taken lightly — preparation and experience is essential! Among the important questions to consider when pursuing a short sale is the big question: Does my Realtor understand short sales?

To help you evaluate how prepared your Realtor is for handling a short sale, have a discussion with him or her about the short sale process, and be sure to ask lots of questions. If you don’t hear the answers or the knowledge and familiarity that you’re looking for, be prepared to keep looking for a Realtor that’s equipped to help you.

  1. Who is the service company and what do they do in the process? In general, the service company of the mortgage is the name on the mortgage statement you receive every month. Bank of America, Chase and Wells Fargo are common service companies. In most cases, the service companies are only in charge of processing the file and have very little to do in the decision-making process and negotiation of the sale itself.
  2. Who is the investor? Fannie Mae, Freddie Mack and Ginne Mae tend to be the investors of the majority of loans. Large service companies such as Bank of America, Chase and Wells Fargo may also be an investor on a mortgage. The investor is usually the decision- maker on each loan and has specific guidelines to follow in negotiating a short sale. Experience in negotiating with different investor guidelines is essential experience for a Realtor to have in order to have a successful close of escrow
  3. Who is the MI Company? Not all loans have MI (mortgage insurance), but some do. In the event that there is MI on a loan, you be certain that the MI Company is going to negotiate with you (the seller) before allowing a close of escrow. The MI Company is generally covering the loss in the short sale and paying out the investor for the loss on the mortgage, So, the goal of the MI Company is to reduce the lost payout as much as possible.
  4. How will each be negotiating with me? This is a great question for an agent. Negotiating with service companies, investors and MI Companies is not like negotiating a normal purchase contract. The process is bureaucratic, paperwork-intensive, and detailed. Experience really pays here and a good Realtor will know how to get it done and cost you very little at closing. However, a lack of experience and less-than-thorough paperwork by your agent could result in you writing a large check at closing, or worse, a foreclosure.
  5. What are the potential tax consequences? In every short sale, there are potential tax consequences that a seller must deal with. Asking your CPA or tax advisor about your particular situation and possible consequences is a very important part of planning for your future. A Realtor should have some general knowledge of the potential consequences as well as a good reference for you to get further help, but should also encourage you to discuss with your CPA or tax advisor.
  6. What are the potential liabilities after closing? Most loans are written as “non-recourse”, meaning that the lender will not be able to pursue you in the future for a loss incurred. However, some loans are recourse loans in which the financial institution may choose to pursue legal and collection avenues for the loss. When working with a recourse loan, there may be future liability and it is wise to consult an attorney about the situation.

Our Phoenix AZ Realtors have the short sale knowledge and experience to help you succeed – contact us at www.ThompsonGroupAZ.com or 480-776-5214.

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Getting Ready to Sell? … Freshen Up the Inside

A prospective buyer’s willingness to buy more quickly – and at a higher price – is often driven by emotion. A home that shows exceptionally well helps arouse the prospective buyer’s emotional desires for that home. First impressions count. That’s why you’ll see neat, clean homes getting snatched up while others just sit there on the market. Builders of homes in the Phoenix Real Estate market spend hundreds of thousands of dollars to stage a model home properly, and they do this for good reason. Buyers will buy the perceived value of the property.  Buyers buy the image and feeling that a received from experiencing the property.

The emotions that you, the Seller, are trying to stimulate are triggered by sensory experiences. Aim for the senses – especially touch, smell, and sight. Uncluttered, clean, fresh-smelling homes sell faster and for higher prices. Try to clear your mind of any preconceived notions, then walk into your house, close the door, look around… and truly feel your house. Then consider these steps:

  • Organize and de-clutter! Remove clutter from countertops, desks, and garage. Remove excess furniture. Organize closets, drawers, storage areas. Throw away, sell or store excess! Rent a storage unit if necessary. Clutter makes the home appear smaller and masks the home’s good points.
  • Freshen up interior paint as needed. Again, fresh paint is the best bang for the buck. Light, neutral colors such as beige, white, or off-white have a broader appeal and can make small rooms seem larger and airier. Remove ‘tired’ or busy wallpaper. Brighten drab garage interiors, storage areas with fresh paint. Paint/stain woodwork as necessary.
  • Make kitchen and bathrooms sparkle. Clean/oil cabinets, clean appliances/fixtures. Add fragrances. New color-coordinated towels are an excellent investment. Fresh looking kitchen and bathrooms will often make or break a sale.
  • Clean floors and carpeting. Add carpet freshener to carpeting which is ‘tired’ or to eliminate smoking or pet odors. If you have a smoker in the house, ask that person to smoke outside and to dispose of the ’spent’ smokes in the trash.
  • Make minor repairs. Tighten loose knobs, fix leaky faucets, lubricate squeaky hinges, replace filters, tighten loose banisters, repair doors and doorknobs, remove stains, and make sure your doorbell works.
  • Make sure all lighting fixtures work. Add new bulbs with the highest wattage allowed to make your rooms seem brighter. Light, airy homes seem bigger and more inviting. It’s well worth the extra cost.
  • Is the fireplace in good working order? Remove ashes from the fireplace and add fresh logs.
  • Buy fresh, colorful indoor flowers or plants. They get a lot of mileage, and they will enhance your new home as well.
  • Exterminate. One bug, dead or alive, will make a bad impression on prospective buyers. Hire a professional.

Selling your home is a process, not a single event. Getting your home ready to sell is part of that process. As you prepare to put your home on the market, make sure to pay close attention to how your home is prepared to show – it can make all the difference in the world.

Do you need help?  Contact us at www.ThompsonGroupAZ.com or 480-776-5214 to get started.

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Purchasing a Home: How Much Can I Afford?

Before going to look for that perfect home, before writing contracts, before considering all the fun upgrades in the home, one important question needs to be asked, “How much can I afford in a new purchase.” Whether you have a stash of cash in the bank, or a very tight budget, most loan officers are going to need a little information before they can give you a good answer.  Here are a few important items to think over and have in mind when you speak to your favorite loan officer:

  • Down Payment – How much do money do you have saved for a down payment? Of the money you have saved, how much do you want to budget toward a home purchase.  There are FHA loan programs where the down payment is as low as 3.5% of purchase price. While these are great loan programs for making a home purchase, these programs also require mortgage insurance and result in a higher mortgage payment. Other programs that require 20% of purchase price for down payment are available.  These loan programs do not require mortgage insurance. Generally, the higher your down payment, the better the loan program is for the purchaser, because the bank is taking less risk on mortgages with higher down payments.
  • Closing Costs of the Mortgage – Every mortgage has closing costs that range between 2-4% of the mortgage loan amount. That could be $4,000 in closing costs on a $200,000 mortgage. The amount of closing costs varies from lender to lender and different loan programs. Closing costs may also be paid by the seller, allowing a buyer to keep that cash in the bank. If closing costs are paid by the seller, the loan amount tends to be 2-4% higher and the mortgage payment will reflect that higher loan amount.
  • Interest Rates – Currently mortgage rates are under 4.5% on a 30-year fixed mortgage.  While this rate is higher than the lowest interest rates of the past few years, this rate is still a great rate for a mortgage. As the interest rate rises, the amount a homeowner is able to borrow goes down.
  • Property Taxes – Property taxes are generally paid through the mortgage payment and divided into 12 payments. Typically, property taxes are $1,200-$1,800 annually. The result is that property taxes will add $100-$150 to a mortgage payment.
  • Home Owner’s Insurance – Costs of insurance runs around $40-$60 per month. Costs vary depending on the company you choose, the amount of the policy, and any additional coverage you want to add to that policy.
  • Mortgage Payment – With all this information, a great loan officer is going to be able to calculate what you are able to afford for a purchase price on a home. The loan officer is also able to calculate what your monthly mortgage payment will be. If you feel the mortgage payment is too high, then it is possible to reduce the purchase price down to a payment that is more affordable.

So… are you:

  • Tired of just reading and talking about a new home purchase?
  • Itching to get started finding that special home?
  • Ready to find out how to get a great deal?

…then the Thompson Group is ready to help! Reach us at 480-776-5214 or www.ThompsonGroupAZ.com to get going and find your new home.

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Experience Matters – Questions to Ask Your Agent Before Selling

All our clients have presented us with unique situations in the past when looking to sell their Phoenix Arizona Homes. Whether moving out-of-state to take a new job, hoping to buy a bigger home with a pool, needing to be in a new school district, or looking to downsize to a home that is more manageable, our clients all had something very important in common. Each had future plans – plans that depended heavily on how the logistics of the sale were handled and the financial results of the sale.

 Marketing and Selling Homes is Serious Business.

A well planned and executed sale of a home allows the homeowner to move forward with their next phase of life. However, mistakes may cost thousands of dollars and hours of stress when escrows are canceled. Nothing may be more important in the transaction than the knowledge and experience of the agent giving you advice. So, here are a few good questions for you to ask your agent:

  • What do you know about the area? At times, knowledge of the area can be the key to selling a home. Buyers that are new to the area need to know information about schools, movie theaters, shopping and more. An agent who lives in the area can help buyers identify how they will enjoy the area –  and many times, the home will sell quicker.
  • How do you market my home? Believe it or not, some agents think that ordering a “for sale” sign and putting your home in the Phoenix MLS is how to sell a home. This is only the beginning! Great agents should be able to deliver to you a written marketing plan tailored for the Phoenix Real Estate market along with success stories from using that plan.
  • How much are the costs of selling my home? In order to plan for the future all homeowners with Phoenix Homes for Sale need to know the amount of money they will have after the sale of the home. Great agents should be able to estimate the cost of real estate commissions, title fees, loan costs, repair costs, and property taxes.
  • When will the buyer’s loan be approved? Without loan approval, the sale of the home cannot close escrow. In tracking a lender’s process, a great agent should know how to use the LSU (Loan Status Update) form, what “PTD” conditions are, and what is the time needed for a lender to get loan documents to title after full loan approval. Being able to track the lender’s progress is essential for a seller to know whether they will close on time or not.
  • What is breach of contract and how do you handle this? In the Arizona purchase contract, the seller is unable to exit the contract while the buyer retains over five  exits from the contract. However, if the buyer is in breach of contract, then the seller may exit the contract. Breach of Contract occurs when the buyer takes actions that are contrary to the written contract. This is a serious situation that experienced agents should have a plan to handle.

Do you want to learn more about how to make your home-selling process go smoothly? Our knowledgeable Phoenix AZ Realtors are here to help ensure just that. Contact us at www.ThompsonGroupAZ.com or
(480) 776-5214.

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Want to increase your net profit? Control those costs!

My grandfather once taught me “a penny saved is a penny earned.” Nowhere is that more true than in the sale of a home, probably due to the number of pennies involved in the transaction. With sales price being such an important factor for a seller, few stop to think about ways to minimize the costs of selling their Phoenix Arizona Homes. Monitoring and controlling the costs in the sale is key to saving thousands of dollars and to receiving larger net proceeds from the transaction. Here are some costs to keep your eye on.

One of the largest costs is commissions paid to the Phoenix Real Estate agents. Commissions vary from 4%-7% of sales price depending on the type of real estate transaction. While lower costs may seem like a winner, many times you get what you pay for. With so much riding on the selling price, Phoenix AZ Realtors should bring great service, a solid marketing plan and sharp negotiating skills to the table. If your agent is bringing less to the table you may also see a lower sales price.

With every home sale, home owners are required to pay the Owner’s Title Policy and to share in the escrow fee paid to the local title/escrow company. While the fees are not negotiable, the title/escrow company used to process the transaction is negotiable. All title/escrow companies publish their fees in rate books which are readily available to review and compare.

Do you live in a Home Owners Association (HOA)? If so, then your HOA may charge a transfer fee, disclosure fee, or capital improvement fee. Few homeowners understand what their HOA will charge them for the transaction but charges may run from $500-$2000. A quick phone call to the HOA should clarify what fees are charged. While these fees are non-negotiable with the HOA, there is the possibility of negotiating/sharing the cost of these fees with the buyer for your home.

For most Phoenix Homes for Sale a Home Warranty is considered a must purchase for the new buyer. The cost ranges from $325-$600 and is a negotiated item payable by the buyer or the seller. Many times home sellers pick up the cost of a Home Warranty for the first year to protect the new buyer from unforeseen repairs.

Are you in an area where first-time home buyers are known to be moving? The Phoenix MLS will show history of recent purchases in your area if you are unsure. If so, you may want to prepare yourself for requests to contribute to the buyer’s closing costs. These contributions are generally up to 3% of purchase price and could be more. The contribution covers appraisal fees, A.L.T.A. title policy, impound accounts, origination fees and other loan costs. While the contribution to buyer loan costs can be very important to getting a home sold, stronger buyers rarely need such assistance.

Do you want to learn more about ways to control your selling costs and get the most money from the sale of your home? Contact us at (480) 776-5214 or www.ThompsonGroupAZ.com.

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