Fairbanks Real Estate: Understanding The Price Of Your Home

Selling Fairbanks Real Estate | Posted by Chris
Aug 07 2010

If you are ready to sell your home in the Fairbanks Real Estate Market, but don’t understand how the asking price is determined then follow this:

There are a number of ways to determine your home’s value.  The first item  is to disregard your view of your home’s worth and start considering what it is worth to a prospective buyer.

Chances are you have invested a lot of time and money into fixing up your house to be the perfect home.  A buyer doesn’t share your memories or care about your financial situation.  A buyer cares about the value of the home in their lives.  Looking at what’s important to you doesn’t always translate to what’s important for the next person.

You will want to counterbalance your personal touch to make the property appeal to a wider array of buyers.  The last thing that you want to hear for showing feedback is “didn’t like the colors”.  Because paint and carpet are relatively cheap in the grand scheme of things.   The cost of time and materials in paint can easily yeild a 300-600%% return on investment in terms of home price.  Spending $2000 to yield a price of $10,000 is very reasonable for Fairbanks Real Estate.

Second you need to do some comparing of properties.  Your realtor should provide you with a CMA, or a comparative analysis of the Fairbanks Real Estate Market.  This document will show you what homes with similar amenities, features, size and location have sold for recently.  This will give you a better idea as to what factors affect value and how you can tweak things in your home to gain maximum value.

Drive by other homes on the market to see the curb appeal, would you want to go inside?  Ask yourself what things seem to be most important about the outside. This helps you to look at the home from the viewpoint of a buyer rather than a seller who can’t get past the “custom touch’s” that must be worth more than what your realtor tells you.  A good indicator is the price per square foot method.  Its not always the most conducive method, but gives a good idea as to how properties are appraised in Fairbanks Real Estate

The curb appeal is important, if you can’t get them on the outside, you will never be able to get them on the inside of the house.  Mow the lawn, clear the clutter, touch up paint.  Plant flowers if at all possible.  Make sure you have colors that accent with each other so that it feels warm and inviting to a possible buyer.

Then after that, you need to look at options.  Maybe a lease-purchase works out for the buyer.  Possibly a quick closing so the buyer can move in quickly.  Or even offering a flooring allowance of which the buyer can choose to use for whatever they want including closing costs to make it more financially feasible.

How this helps is that it gives the buyer options.  They might use it to save some money on closing cost and elect to replace the flooring in the future when it is more economically feasible to them.

These added benefits could help you get a great price and help the buyer choose your home over other Fairbanks Real Estate.

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On Fixing Credit To Make A Home Purchase For Fairbanks Real Estate

Buying Real Estate | Posted by Chris
Aug 06 2010

A lot of people who aspire to own their own home will let the fear of their credit score stop them from ever exploring what their actual score is and how to improve it. This is definitely the #1 reason to start the ball rolling…

As you night have guessed the odds are already stacked in your favor. Yep you guessed it, over 130 ways that your credit can be weakened as opposed to only 5 ways that your score can be improved.

First, you need to obtain a copy of your credit report and contact your creditors. You will need to explain your current situation and offer to pay a percentage of your outstanding bill. Often creditors will settle for 30-40 percent of the total bill. Once you have made your partial settlement payment, get them to issue you a signed settlement letter. THIS IS VERY IMPORTANT. Copies of these letters will need to be sent to all of the credit bureaus (Equifax, Trans Union, and Experian/TRW).

In the eyes of a lender, this is a better method of rectifying your credit than setting up a payment plan though a consumer counseling service. By resolving your own credit problems using the partial payment approach, it demonstrates to lenders your ability to be a responsible credit user. In addition to avoiding the consumer counseling services, you should also avoid filing bankruptcy if at all possible. This act will stay on your credit for a period of 5 to 10 years depending on your state.

So one effective method to redeem your credit status is to go get a secured credit card. Simply just put a deposit down with the bank that you are applying to for the card and the amount that you have in the account is the limit that is on your card. There is no risk to the bank and you get to build credit again.

We always encourage that you let your Realtor refer you to a local lender. They know the local banks that have the ability to get borrowers financed even without “perfect” credit.

So once the process of repairing your credit has began, it is crucial that you make your payments on time. Lenders who have extended a 2nd chance to somebody who has had credit issues in the past will not be so patient with you the second time around. You have now taken control of your finances…DON’T LOSE IT AGAIN! Make sure that you prove to be able to take charge of your credit future.

Once you have shown a history of payments made on time, in a a year to two years you can refinance at a prime rate if the rates are better than what they were when you first obtained financing. The amount saved over 30 years on even a half of a point in interest adds up to thousands and even tens of thousands of dollars. You want to know that you didn’t waste money

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Receiving The Most Money For Your Fairbanks Real Estate

Selling Fairbanks Real Estate | Posted by Chris
Aug 01 2010

There’s a right way to show a home…and a wrong way. Many homeowners lose money, or turn-off buyers because they simply didn’t know how to handle a home showing. Here are 8 tips that will help you show your home for maximum profit:

1. Save those receipts. If you completed any substantial work on your home, save the receipts and ONLY take them out if someone questions the value of the work performed (in the negotiating process). Many times extra work will increase the value of your home beyond your costs. So only use the receipts if you need support to justify the work.

2. Keep records of the utility bills to back up your disclosure statements about the monthly utility costs. This helps improve credibility with the buyer and may make the difference in key questions that buyers may have. The types of utility bills to save are including but not limited to water, sewer, trash pickup, heating fuel, electric and gas or propane.

3. Leave the property during showings. The buyer cannot focus with too many people around. They have to be able to visualize them self living in the property without somebody constantly mentioning every feature and benefit about the property. A buyer will not feel comfortable thoroughly investigating the property if they feel “eyes on their back” from the seller watching them.

4. Turn on ALL lights during showings. Illumination is like a welcome sign. Even in the middle of a sunny day.

5. Open all drapery and bring in as much natural light as possible. Buyers hate dark homes. Anything you can do to brighten your home will help.

6. Turn off any radios and TV’s. Turn off the football game. Tell the kids that the loud music will need a reprieve while the home is being shown. Occasionally very soft, background music can enhance a showing. But generally no music at all is your best bet.

7. Plan a pleasant aroma. Cinnamon sticks or vanilla boiled in a pot of water on the stove emit pleasant aromas and make a home smell inviting. Apple and cherry wood smoldering an a fireplace do the same. And who can resist the smell of apple pie or fresh bread baking in the kitchen. Often, these pleasant smells can override other odors your home may have. Keep pets out of the home during showings. It’s best to keep them out of the home for an entire day before an open house. That way the “pet smell” has time to subside.

8. Last but not least, put away the many little decorative trinkets and multi-colored items that don’t match with the homes main 3 primary colors… the carpet, walls and main furniture color. Buyers will feel cluttered and not relax if they have a lot of different colors stimulating them, especially if they don’t accent or match.

~Chris

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Chris Rocheleau On How Much Can I Pay For Fairbanks Real Estate

Buying Real Estate | Posted by Chris
Jul 30 2010

When you’re thinking about buying a house, the lender or your Fairbanks Real Estate Broker will calculate the price that you qualify for by 2 different methods.

The Payment to Income Ratio is a fairly simple formula.  It adds your future mortgage payment, property taxes and insurance together to get what is called a “PITI” payment.  Taxes usually mean there is an assessment of taxes on your property and sometimes depending on your area there might be a tax on the transaction itself.  The insurance is usually two-fold.

The first type of insurance has to do with the physical real property and its called “homeowners insurance”.  The second type is private mortgage insurance, which only takes place if you are putting down less than 20% of the appraised value of the property.  So most homeowners pay this type of insurance for the first 5-10 years depending on how their loan is structured until they reach 20% equity in the value of their home.

The PMI figure is what an original mortgage was created on, 20% down and the bank would loan the other 80%.  Since today that is still considered “acceptable risk” by lenders, they will charge PMI anytime a down payment is under 20%.

Some industry standards just don’t change regardless of how much time has passed.

So now if you add your “PITI” payment along with all other monthly payments including credit card payments, investments, car loans plus all other fixed monthly expenses then you get a figure know as your Debt to Income Ratio.   This percentage is varies from lender to lender based on how high of a percentage they are willing to approve a loan on.  I have seen as high as 38%.

So if you calculate your payment to income ratio and you find a fairbanks real estate monthly payment that is about 30% of your total income, then you know what you can afford after looking at a loan amortization chart which you can get from your local fairbanks realtors or from your local lender.  This will tell you the amount you can borrow to purchase a home.  Notwithstanding, this number has to be adjusted once you know how much you will be putting down, current interest rates and the terms of the mortgage.

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