5 Walk-Through Surprises and How to Avoid Them

A house may look one way when it is decorated and furnished, but once vacated, bumps and bruises may show that could cause a wrench in the closing. Here are five common issues that arise during a walk-through and how to handle them.

You’ve survived the inspection and loan approval process. You are almost to the closing table and ready to sign on the dotted line, but before you arrive, there is one last hurdle to climb known as “the walkthrough.” Whether you are a buyer or seller, this process can be nerve-wracking – as a buyer, you may be thinking: Will the house will still look how I thought it did? Will everything be empty and in good condition? And as a seller, you could be worried whether the buyer will be satisfied with what they see, and what if they raise concerns?

First, it is important to understand what a walkthrough is as well as its purpose.

A walkthrough is when a buyer walks through the property either the day prior or on the way to closing to ensure all is in substantially the same condition as it was before.

You may think this is a quick process that should take no more than 10-15 minutes at the most, but it is the buyer’s last look at the house before making what is likely the single largest purchase in their life. They will be closely scrutinizing everything. Additionally, because in all likelihood this is their first time seeing the house completely empty, this could raise some issues not previously seen.

A house may look one way when it is decorated and furnished, but once vacated, bumps and bruises may show that could cause a wrench in the closing. Here are five common issues that arise during a walkthrough and how to handle them:

1. Flooring – discolorations on wood or carpet. This happens as a result of furniture and rug placement over long periods of time, coupled with sunlight that could cause fading or discoloration of the exposed flooring around it. The buyer doesn’t initially see this, as a seller’s belongings are never moved for showings or inspections. Consequently, on a walkthrough of a vacant house, this could result in visibly noticeable variations in the floor finish as well stains, particularly on carpet. As a seller, you may have forgotten about some stains that are on the carpet where furniture and/or area rugs have sat on top of it for years.

​Before putting your house on the market, check any areas of your home that have had furniture and/or rugs sitting on top of floor surfaces. If there is discoloration, consult with a wood flooring specialist on how to address, call in carpet cleaners or consider possibly replacing/repairing the flooring in question before going on the market. Note any issues upfront to establish condition at the time the home goes on the market to a buyer and on a seller’s disclosure so as to avoid any surprises later on.

2. Walls — Once the artwork and flat screen TVs comes down, the walls are often left with nail holes, brackets and possibly discoloration where objects were previously hung. While it may seem premature when an offer is received to even think about dismantling the house, discuss with your agent a plan for “spackle management” when finalizing contract terms. Better to deal with this upfront vs. trying to figure out what to do right before closing because nothing was mentioned in the contract. Setting realistic expectations at the outset as to what you as a seller will do, such as spackling, will hopefully avoid a buyer’s request for you to repaint walls entirely. It may be that the buyer likes the existing placement for artwork and your television and will want these areas left as you had them.

3. Leftovers – While these are always appreciated after a good Sunday dinner, your left over house stuff is not always wanted or needed by the buyer of your home. Moving always brings a “don’t know what to do with pile.” It may be a stray chair, file cabinet, old lawn hose or other various odds and ends. Don’t assume the new owner will be glad to have these items. Check with the buyer first, if they don’t want them, play it safe and have them removed BEFORE the final walkthrough.

4. Garbage – Speaking of removal, don’t leave garbage cans full of trash for the new owner to take out. The buyer has enough to deal with as far as coordinating movers, getting utilities turned on, waiting for the cable guy and all that goes along with setting up a new home. This is usually a surprise not discovered until the walkthrough or their first trip to the house as the new owner. A pile of trash either in the garage or on the driveway is not a closing gift that should be left behind.

5. Mover Damage – With a moving crew transporting furniture and boxes out of your house, the opportunity exists for unintended damage to occur. Drywall dings, nicks, scratches or gauges can be left, often not discovered until a buyer does their walkthrough, or of course right after they go to the house after closing. Once the movers are finished, do your own “move-out” walkthrough with them to check for any damage. Discuss with your movers ahead of time the plan for handling any damage and have a trusted repair person on standby to take care of any issues should they occur.

Victoria Keichinger, Coldwell Banker Blue

Get Moving! 4 Urgent Reasons You Should Sell Your Home in 2017


If you’ve been sitting on the fence about selling your home, it might just be time to hop off. Now. To put it in other terms: 2017 is poised to be the year of the home seller, real estate experts say. So what are you waiting for?

“Sellers have been in the driver’s seat for the last two years, but this year is shaping up to be even better for several reasons,” says Jonathan Smoke, chief economist of realtor.com®. “Nothing is bad for sellers today.”

A combination of factors is coming together to make 2017 a prime seller’s market for most of the nation. Here’s what’s driving it:

Reason No. 1: Mortgage rates are still low

It’s all about rates, baby. Low mortgage rates translate to lower monthly costs. Lower costs entice buyers, which is good for sellers.

Although mortgage rates have been ticking up since mid-October to slightly over 4%, the rates for a 30-year fixed mortgage—the most popular home loan—are still hovering near 30-year lows. For now.

“We expect them to hold at this (4%) level for a while and continue to adjust up,” says Danielle Hale, managing director of housing research for the National Association of Realtors®. “Mortgage rates rarely move in a straight line. They could be in the 4.6% to 4.8% range by the end of the year.”

What does that have to do with home sellers? Well, potential buyers who are armed with that knowledge might hustle to close on a home before a rate hike.

What if you’re nowhere near ready to put your house on the market? That’s OK. Even if rates nudge up by the end of 2017, they’re still expected to be low enough to seduce buyers. The tipping point is when rates reach 5%, experts say. That’s when they could put the brakes on the robust real estate market.

“If they go above 5%, we’re going to see home prices come down,” says Trevor Levin, a real estate agent with Nourmand & Associates in Los Angeles.

Reason No. 2: Inventory is shrinking

Remember in Econ 101, when you learned that low supply and high demand lead to rising prices? The same is true—in spades—for residential real estate. When inventory shrinks, available homes become more valuable. As Martha Stewart would say, that’s a good thing for sellers.

Let’s put it in perspective: In 2007, just before the housing crash, existing home inventory peaked at 4.04 million homes for sale, according to NAR data. Fast-forward to November 2016: There were only 1.85 million homes for sale, 9.3% lower than the year before—and a whopping 54% lower than the 2007 peak.

“Quite simply, sellers this year have the least competition,” Smoke says.

And get this: Not only are there fewer homes for sale, but the time those homes have spent on the market has decreased year over year as well. If priced correctly, the typical home should move quickly, Smoke says. And that’s another boon for sellers.

“Many potential sellers don’t want to think about having to prep a home for showings and deal with an indefinite period of having to keep things in perfect shape,” he says. “Fast-moving inventory limits that pain.”

Reason No. 3: Home prices are rising

Lower inventory and greater demand have pushed up home prices. The median existing-home price in November 2016 was $234,900, up 6.8% from November 2015, when it was $220,000, according to the NAR. And that’s no fluke. That was the 57th consecutive month of year-over-year gains.

Higher prices particularly benefit the seller whose property value plunged during the recession, sometimes to less than he owed. Thanks to rising prices, many homeowners whose property was underwater can now sell without suffering a big loss.

“2017 will be a rare ‘balanced market’ for buyers, because even though mortgage rates are edging up, many sellers have recovered enough equity to be able to afford to sell,” says Colby Sambrotto, president and CEO of USRealty.com.

Reason No. 4: Job markets are strengthening

As unemployment decreases and wages (finally) increase, consumer confidence will climb. Increased confidence will spur buyers to jump into the market—which is, you guessed it—more good news for sellers.

These pieces of the puzzle create a “virtuous cycle,” Smoke says. It’s not a term he coined, but it’s one he hasn’t had a chance to use in many years.

“These things are all connected,” Smoke says. “If people are confident, they’re more likely to buy big-ticket items like houses and cars. And then they spend more money on other things. It reinforces the economy, creating a virtuous cycle.”

The only ‘bad’ news for sellers

If you sell your home today, you mostly likely will buy another. Then, all the economic factors that worked in your favor as a seller will work against you as a buyer.

Sellers have a few options. You can rent for a while, and hope that prices come down in the future. But whatever you save on the price of a house you could surrender when mortgage rates climb to 6%—as predicted for 2019 and 2020, Smoke says.

The take-home lesson: Don’t wait, because mortgage rates won’t.

“There are opportunities for a seller-turned-buyer who wants to downsize in this market,” Smoke says. “You can lock in financing rates that you’ll never see again, and very likely make the trade-off work.”

Lisa Kaplan Gordon, Realtor.com

Move-up buyers: Sell or rent out your original house?

Many homeowners who need to move decide to sell their current home so they can have plenty of cash to buy their next digs. Still, though, some might wonder: Should I sell or rent out my house? It’s a good question.

Owning rental property, after all, brings in predictable, long-term income. But make no mistake, backing into a landlord role comes with some hefty responsibilities – and no small amount of headaches.

Here are some questions to ask yourself to help you decide which road is right for you.

Can you afford to own two homes?

"Financial wherewithal should be the No. 1 component as you weigh whether to hold on to the house," says John Lazenby, 2016 president of the Orlando Regional Realtor® Association. Here’s what that means:

First, consider whether you will need two mortgages, one for the new house you are (presumably) buying and one for the potential rental. If you have owned your home long enough, you may have enough equity that you can pay off the balance and be free and clear. If not, you’ll want to consult with a mortgage adviser to make sure you will qualify for a mortgage on both the rental and the home you’ll be living in.

Do the math on the return on investment of a rental. Check into local rental rates and see if there is a viable tenant stream, says Koki Adasi, team leader and founder of Koki & Associates at Long & Foster in Washington, D.C. If you are depending on the rental income to cover the mortgage on your new home, you’ll need to be able to charge enough to cover that and then some. After all, a rental comes with its own expenses-like maintenance, repairs, and, if you opt for it, property management.

There also may be times the house sits empty between tenants.

"If the total monthly amount that you need supersedes rental market value, you may end up taking a monthly loss," Lazenby says.

Also factor in potential tax benefits, advises Adasi. "Check into what costs you can write off, such as mortgage interest, property tax, operating expenses, depreciation and repairs," he says. In most states these expenses are tax write- offs; you also might be able to deduct fees associated with running the rental, including property management, attorneys and cleaning services.

Will your old property appreciate?

Market conditions should weigh heavily in your decision as well.

"If you purchased the home at a good price and its value is rising steadily, you may want to hang on to it and accept any potential monthly loss in exchange for keeping your investment," Lazenby says. You also might want to keep the home if you’ve recently purchased it and it has not yet increased enough in value to cover costs associated with selling, such as closing costs, transfer taxes and other fees, says Adasi.

Look into comparable values in the neighborhood to evaluate the long- term outlook. Determine whether trends are pointing toward it being an up-and-coming locale or one on the decline. Although it’s impossible to predict the future, those types of evaluations can help you determine if the property is likely to rise or fall in market value.

And, consider the "opportunity cost." Evaluate whether you would potentially make more investing that money elsewhere, such as in the stock market or other retirement vehicle.

Can you effectively oversee the rental?

Being a landlord isn’t for everyone, points out Lazenby. "Ask yourself if you will be able to tolerate the stress that comes with being responsible for the home you’re living in, as well as a rental, particularly if it is long-distance."

And before you become a landlord, you need to conduct your due diligence: A decent amount of upfront research is needed on the licensing and other laws that pertain to rentals in your city, county and state.

Will you ever want to return to your home, sweet home?

If you’re relocating, either for work or personal reasons, consider the possibility that you might return to the area at some point to be near family or friends, suggests Lazenby. If the home offered everything you wanted and the financial factors line up, you may choose to rent it out so that you one day have the option to return.

Home prices up; median cost $315,000

Housing market shifts from high-end houses to middle-class abodes.

By Jeff Ostrowski Palm Beach Post Staff Writer

Reflecting a slowdown in the high end of the real estate market, the average sale price was down 10 percent from a year ago. Big-dollar mansion sales skew the average price higher, while a lack of high-end deals pushes the average price down.

“Sellers don’t want to hear it, but the absorption rate is just totally different than something that’s $400,000 or $500,000,” said Victor DeFrisco, broker at Exit Realty Premier in suburban Lake Worth.

As the housing market continues its bumpy recovery from the Great Recession, the activity has shifted from high-end houses priced at more than $1 million to middle-class abodes.

“Anything under the $500,000 mark is very, very active,” said Terry Story, an agent at Coldwell Banker Residential Real Estate in Boca Raton.

Story works in a market that boasts two of Palm Beach County’s hottest neighborhoods for 2017, according to Seattle-based brokerage Redfin. The company says the Hidden Valley and Boca Square neighborhoods east of Interstate 95 are poised to be the county’s most active. Both boast homes in the $300,000 to $400,000 range, the sweet spot for prices at the moment.

Story can attest to the intense demand in Boca Square. She recently listed a home there for $415,000 and got five offers. The seller signed a contract for “well over $415,000,” she said — even though the house itself was a solid but unspectacular property with no pool and a one-car garage.

“ The demand is high because it’s a nice area, it’s close to downtown and it’s in a very good school district,” Story said.

Despite such tales of a heated market, sales volumes took a dip this past month. The number of sales fell 5 percent compared with December 2015, perhaps reflecting a tight supply of homes for sale and rising prices. Realtors recorded 1,413 sales this past month, compared with 1,486 a year earlier.

The condo market followed a similar path. The median sale price rose 7 percent to $163,500, but the number of sales fell 10 percent to 1,013.

“December was a little slow, but it always is — it’s our worst month,” DeFrisco said.

In a sign that the housing market has mostly recovered from t h e Great Recession, “distressed sales” have all but disappeared. The number of foreclosure sales plunged 46 percent from December 2015 to December 2016. Short sales — transactions when the seller owes more than the house is worth — fell 34 percent.

One wild card for the housing market is the direction of mortgage rates. They jumped after the presidential election, and most forecasters expect them to top 4.5 percent by the end of 2017.

Some see rising mortgage rates as a good sign.

“Sitting there at 3 percent for the last seven years — that’s not healthy,” DeFrisco said. “It shows you that the economy isn’t going anywhere.”

Story said rising rates have spurred many homeowners to put their houses on the market. They want to sell their current homes and buy new ones before rates rise, she said. jostrowski@pbpost.com

Twitter: @bio561

Copyright © 2016, Palm Beach Post, All rights reserved.

How Much Does It Cost to Sell a House? Here’s a Reality Check

Show me the money! Admit it, that’s what you’re thinking when you consider selling your house. In fact, chances are good you’ve mentally spent much of the proceeds already—on a new house you’re buying, and maybe even a nice vacation this summer. Slow down there—while selling a home can indeed bring in some sweet profits, not every dollar goes into your pocket. You also have to pay the professionals who help you unload your property. So now the question in your mind is probably: How much does it cost to sell a house? Really?

On average, home sellers pay their listing agent a commission amounting to about 6% of the price of their home (although that percentage can vary). On a $250,000 house sale, this amounts to roughly $15,000.

That might seem like a yuuuuge chunk of change, but don’t go assuming you’re getting ripped off! Here’s where that money goes, and why it’s totally worth it.

The real estate agent commission, explained

If you’re picturing your real estate agent pocketing the whole sum, think again.

“Sellers are often confused by the often-quoted ‘6% commission fee,’ and it’s because many agents don’t explain clearly why it’s being collected,” says David Nelson, a real estate professional with Re/Max Advantage Plus in Minneapolis/St. Paul.

In fact, that commission is split between the buyer’s agent‘s brokerage and the seller’s. They might split it evenly, or the seller’s agent’s side might get a bit more. From those splits, the respective brokerages take their cut—which, again, varies—and the remaining amount goes to the agents.

Remember, most agents don’t receive a salary, so that fee pays for all that time the agent spent marketing your home. It also includes costs like photographs and signage, as well as the cost to list it on the multiple listings service. And if your house doesn’t sell, the agent doesn’t get reimbursed for those costs—or paid for her time.

How much sellers pay in closing costs

While buyers tend to pay more in closing costs, sellers aren’t completely off the hook. You can expect to spend an additional 2% of your home’s price on this expense, says Keith Gumbinger, vice president at mortgage information resource HSH.com.

Closing costs tend to be fixed, including transfer taxes, escrow expenses, and notary fees. You’ll also pay at closing any outstanding property taxes, a prorated share of the water and sewage bills, and the remainder of your mortgage.

Yet you may have control over a few closing costs, says Gumbinger. If you hire a real estate attorney to oversee your side of the transaction, it’s worth shopping around to compare rates. You might also be able to avoid a $100 to $200 reissue fee for the title search if you can provide a copy of your policy.

Should I just sell my house myself to save money?

In a hot market, many sellers may think they can sell their house themselves to avoid the commission fees.

However, most people don’t realize that if you sell your house on your own, you still have to pay for the buyer’s agent’s brokerage fee.

“Since over 93% of active buyers have a real estate agent representing them, it’s the only way to attract these agents—and thus their buyers—to even consider your home,” Nelson says.

What about that cash they would still be saving by selling their home as “For Sale by Owner,” or FSBO?

Consider what your agent brings to the party:

  • Marketing, signs, advertising support, and professional photography
  • The time and “hassle factor” savings of not having to be present for showings, manage calls, host an open house, set up legal representation for paperwork, and conduct the negotiations
  • The legal protection that comes with working with a licensed real estate agent
  • The professional market knowledge that can help you wisely price the house
  • Negotiating expertise that allows your agent to extract the best terms and price from the buyer
  • A wider pool of potential buyers that comes with listing your home on the MLS
  • Access to other agents, who have or know potential buyers. In fact, notes Nelson, many sales can happen before a home is even listed, because agents will reach out to one another.

“In the end, that ‘savings’ to list a home yourself doesn’t usually save you any money,” Nelson says. “In fact, it can cost you in terms of time, stress, and often a lower price for your home.”

You know the saying “you get what you pay for”? Well, you also earn what you save. Think long and hard about your limitations in terms of time and expertise before heading down the home-selling path solo. After all, this home sale may be one of the largest financial transactions of your life, so it’s not exactly something you should cut corners on with the hopes of saving a few bucks.

Cathie Ericson, realtor.com

Tricks to Banish Bad Smells From Your Home—Forever


Even if your house looks immaculate, there are few things that will exterminate (with extreme prejudice) any kind of positive first impression than an off-putting smell. Whether it’s eau de cat, last night’s attempt at Nepalese cuisine, or just an overall mustiness, bad odors are bad news—especially if you’re trying to sell your home. After all, as Debra Johnson, a home cleaning specialist with Merry Maids, points out, “If you enter a home and immediately encounter a smell, that is generally all people focus on, and all they will remember.”

Banishing bad odors, however, isn’t as easy as dusting toe kicks. Certain scents are hard to remove—the more so when you’re so used to them, you become “nose blind” and don’t even notice. So for starters, you may have to ask people you trust (or your Realtor®, if you’re selling) to tell you honestly whether they’re picking up a whiff of anything weird. And if the answer is yes, we’ve got some tips and techniques for you.

Learn how to banish these common smells from your home.

Pet pee

The odor of cat urine, in particular, is so obnoxious and persistent that people have actually sued former homeowners for not disclosing it. The odor might be successfully masked during showings, but reemerge once the new owners move in.

Luckily, there are sprays with enzymes that break down odor molecules to remove the stench. The trick is to soak the spot with the enzyme spray, letting it seep down into carpet pads and floors.

If that doesn’t work, you may have to pitch the rug or replace a section of flooring, but not necessarily the whole thing. Cats and dogs are creatures of habit when it comes to doing their business, so replacing just that area may do the trick.

Yesterday’s dinner

Open windows and set the range hood fan on high while you’re cooking fish or other pungent items, then clean pans and utensils immediately. If odors still linger after dinner, set a shallow bowl filled with white vinegar or coffee grounds on the counter to absorb smells overnight. Another tip: Close bedroom and closet doors before cooking fish so clothes and linens don’t absorb the smell.

Pungent paint

A cut onion can neutralize paint smells that can otherwise make your house reek for days. Before painting, peel a large onion and slice it in half. Place each half on a dish and position them in opposite ends of the room. After the onions absorb the paint fumes, wrap and toss. And don’t worry; the smell of the onion won’t linger for more than an hour, tops.

Lingering garbage

Even after you’ve pitched out the garbage, those cans hold traces of trash. The best way to banish the smell is to wash out the can. Then, make an odor-eating sachet: Place some coffee grounds, a couple of tablespoons of baking soda, and a few cloves in the center of a coffee filter. Close with a rubber band or twist tie, then place in the bottom of the can, beneath a clean trash bag.

Whatever’s in the kitchen sink

Whenever you smell a foul odor near your sink, check your drain and garbage disposal, where rotting meat or produce can become stuck and create a major stink. To deodorize the grinder, place two or three slices of lemon or orange in the disposal, turn on the water, and flick on the switch. More things you can grind to remove disposal odors include ice combined with rock salt, white vinegar, or good ol’ mouthwash.

Mustiness

If your home smells musty, you may have a mold problem that only a professional can wipe out safely. To prevent mold, the trick is to control your home’s humidity so that mold spores don’t have a chance to multiply.

“By keeping a home’s indoor humidity to a range of 30% to 60%, homeowners can discourage mold and mildew,” says Ryan McLaughlin, a project manager at 1-800-WATER-DAMAGE. You can purchase a hygrometer, which reads the moisture level in the air, for about $10. If it reaches a mold-friendly level, try the following techniques to dry indoor air.

  • Turn on bathroom fans during and after showers to remove the moisture. Keep the shower door open to dry out the stall.
  • Open windows, if your bathroom has them, to create cross-ventilation and increase air circulation.
  • Buy a dehumidifier to remove air moisture. If you can stretch a hose from the machine to a drain, you won’t have to empty buckets of water each day.
  • Fix plumbing leaks to prevent standing puddles.

By Lisa Gordon, Realtor.com

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Watch: Smart Hacks to Eliminate Bad Odors

Must-watch Items on Your Credit Report

So you have just received your credit report and your score has dropped. Why? There are different items on your credit score that can affect your score negatively. Make sure you keep an eye on the following four must-watch items on your credit report to maintain a good score.

First, you can receive a free credit report once every year from each of the three nationwide credit reporting companies. You can order yours online from annualcreditreport.com or by calling 877-322-8228. (Other sites may advertise free credit reports, but the fine print often requires you to buy a product or service.) Some credit card companies also provide a free FICO credit report, and there are sites such as creditkarma.com where you can view your score for free as well.

Must-watch items

Late payments. Late payments and delinquencies have a huge impact on your credit score. They make up 35 percent of your entire FICO score. If you see marks that bills have been paid 30, 60, 90 or 120 days late, that is extremely damaging to your score. The other important factor is the timeline of how late your payment was and how long ago you made this mistake. The later your payment is, the more it negatively affects your score. The more time that has passed since the late payment, the less it affects your score.

Collections. Any collections activity on your report will go against your score. If you have had an account or bill that has gone to a collections agency, you are probably aware of it, but in some cases you may not be. There are certain situations where you may not be aware of collections action, such as if you didn’t pay the last utility bill after you moved and the collection agency couldn’t locate you. If you see a mark on your report that is not related to you, you can dispute it and have it removed. Any collections item can stay on your report for seven years, but the longer it has been on your report, the less it affects your score.

Active accounts. An easy way to detect identity fraud is to look for accounts on your credit report that you didn’t open. If you have closed an account, it will reflect that on your credit report and you will be able to verify the date you closed it. If an account is shown as open but you have closed it, reach out to the issuer to find out why it is still active.

High debt-to-credit limit ratio. Credit score companies will look at how you utilize your credit cards by comparing the balance on one revolving account with the available credit from the lender. You want to keep your ratio under 10 percent. For example, if your credit card has a limit of $5,000 and you have a $1,000 balance on it, the ratio is 20 percent. If you are running a balance of $7,000-$8,000 on a credit card with a $10,000 limit, it will really negatively affect your score. It is even worse to have high running balances on several cards.

What items do you watch for most on your credit report?