3 Ways Homebuyer Protections

These days, homebuyers are feeling the crunch. A recent report found that 35% of buyers didn’t make an offer on a home they were interested in because it was already in a multiple-offer situation. Only adding to buyer frustrations, the normal contingencies and homebuyer protections normally used in the purchase process are now working against them, as other buyers in the market are ditching them in order to gain competitive advantage with sellers.

But, if you’re a buyer, that doesn’t mean you have to lose your shirt, too. Instead, by working with a licensed real estate agent to navigate using homebuyer protections, you can safely compete in this market — shirt intact! Here are the pros and cons of homebuyer protections you should be aware of for a sellers market, and some guidance on when (and when not to) use them.

Appraisal Protections For Buyers

PRO: If a buyer is obtaining a loan, the lender will only provide funds based on the appraisal value of the home. That may or may not align with the list price. In this current bidding-war market, it’s becoming more common for the sale price to skyrocket well over list price and even appraisal value. An appraisal contingency can offer the homebuyer protection by releasing them from the obligation to pay more than the house is worth if the appraisal comes back low. In the past, buyers have relied on this protection knowing that if the home doesn’t appraise for the purchase amount, there could be an opportunity to renegotiate the purchase price with the seller.

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CON: Buyer desperation has kicked into high gear in such a way that many buyers are agreeing to pay over appraisal value. Since sellers are in the driver’s seat in this market, they want to get the most amount of money out of their investment, and they have enough interested buyers to throw out any offers that might limit their profit. It’s worth noting that  23% of home sales in March 2021 were cash, which doesn’t necessitate an appraisal in the first place. So, if buyer offers are not cash or are not willing to pay over appraisal, they are simply less desirable in this market.

Home Sale Contingencies For Buyers

PRO: Home sale contingencies exist for a reason. Buyers want the protection to sell their current home before closing on the next home to avoid a scenario where they have two mortgages. Just recently, 38% of recent home buyers reported using funds from the sale of a home to purchase a new home. With home sale continencies, buyers and sellers coordinate the new purchase to align with the sale of the first home—and this has typically worked well for many years for both buyers and sellers.

CON: Sellers have realized that they don’t need to accept a contingency offer. In fact, 18% of homeowners recently reported they did not accept a contingency offer because they’d received other offers with no contingencies. Since the buyer’s home sale could fall through for various reasons, sellers don’t want to risk it if they don’t have to; and in this market, they usually don’t. This has put buyers in the predicament of either selling their home first and living in temporary housing to avoid using a home sale contingency, or purchasing the new home first and carrying two mortgages for a brief time.

Inspection Period For Buyers

PRO: One of the most common protections in place for buyers is a home inspection. Since many costly problems with a home can be unseen to the naked eye, it’s important for a licensed professional to do a thorough home inspection on behalf of the buyer. This protection offers buyers the opportunity to walk away from the contract if catastrophic issues are found during the inspection or to renegotiate the purchase price on behalf of the buyer.

CON: As with just about all the other homebuyer protections, many buyers are choosing to waive home inspections. While this can be incredibly risky for buyers, it’s just one more way to stand above the competing offers. Sellers are in a position where they do not have to make repairs to sell their homes, so any offer that waives an inspection has appeal to the homeowner. If buyers are going to proceed with the protection of a home inspection, they should consider stating in the contract that they won’t ask for any repairs unless they exceed a certain dollar amount.

When to Use Homebuyer Protections

Though the national picture of real estate favors sellers, real estate is still a localized market. Not everyone’s market is experiencing the same levels of competition, so this is where working with an experienced agent comes in handy. Your agent has a finger on the pulse of the market, and can guide you to which homebuyer protections you might better “get away with,” if there are any.

For example: if prices are high in your area, but competition isn’t as stiff, perhaps you can still incorporate an appraisal contingency, but forego a home sale contingency. Or, if you and your agent have done your homework on the comps in the area, you may feel more comfortable going without an appraisal contingency. There isn’t a one-size fits all solution, so working with an agent will better equip you to know what you should or should not do.

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5 Stress-Free Tips to settle into new house

Welcome home! You’ve made it through this monumental journey of finding your dream house, and now it’s time to make it feel more like home. Whether you’ve moved halfway across the nation or just migrated into a new building, settling in is your time to unwind and relax. Here are a few ways to make the transition into a new space as seamless as possible.  

 Request a Change of Address   

 Changing your address is an essential part of moving. While it may be pretty self-explanatory, this part can often be missed. Ideally, you should have changed your address about a week before moving. In case you didn’t, do it now! It’s straightforward and can be handled online or in person. Head to the United States Postal Service (USPS) website, search for change of address, and follow the prompts; that way, you won’t be stressing out on any missed mail.  

 Clean Before Unpacking 

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 Whether it’s a new build or an older property, some homes may need a little extra dusting and mopping. Hopefully, the previous owner or contractor has already hired someone to clean the house but plan to clean it before moving in if that’s not the case. While it’s tempting to want to unpack right away, make it a priority to deep clean the entire home first. Try to imagine the amount of foot traffic that’s been in and out of your new house, especially for those with carpets. Look into renting a carpet cleaner, which can often be found at most local grocery stores. They are an inexpensive way to ensure your carpets aren’t holding on to any dirt, bacteria, or pet dander. Hiring a professional cleaning company is also a great option.  

 Unpack One Room at a Time

 Once the movers have arrived at your new place and unloaded your belongings, pick a room to start unpacking. While it may be your goal to finish the entire home in a day, try to be realistic. It’s okay to break down the process room by room and day by day. Take your time as not to get too overwhelmed. Remember, settling in should be as stress-free as possible. Unpack the quarters you will frequently be using first, like the primary bedroom, bathroom, and kitchen. Make it a priority to tackle your bedroom first because getting a good night’s sleep will help relieve any leftover moving stress.  

 Next up should be your kitchen. To some, this the heart of the home, where family meals can be made together. Unpack the kitchen to reduce the amount of money you spend on eating out. Once the kitchen is unpacked, you’ll be able to grab a few groceries and start fixing meals. If your kitchen has a lot of cabinets, pick up some cabinet liners to preserve their lifespan and prevent added moisture and stains. They are great for easy cleanup against dust, leaks, and crumbs.  

 Bathrooms can come next. While you don’t have to unpack the entire bathroom, ensure you have the essentials like soap, toilet paper, and paper towels. If you’re moving into an older home, look into replacing toilet seats and adding toilet cleaner tablets to get rid of any lingering smells. For the showers, hanging eucalyptus around the showerhead is a great way to bring a relaxing spa feel to your bathroom. As you get settled in your new home, double-check the attic, basement, and crawl spaces to ensure the previous owners didn’t leave anything behind.   

 Make the Kids Feel at Home  

Getting your kids used to their new home is a part of settling into your new space. While it may have been a stressful process for yourself, it may be just as overwhelming for them. Let their new room become their sanctuary. Consider letting them help out with the decorations, everything from paint color, new furniture, comforter sets, and more, depending on how old they are. Many younger kids would love a theme-style room. Whether it be superheroes, animals, fairytales, you name it. The possibilities are nearly endless.  First-night jitters may arise, and if they do, have some of their favorite toys or stuffed animals nearby. Nightlights in the room and the hallways leading up to their bathroom are excellent ways to add an extra layer of comfort for toddlers and younger children. Lastly, make sure your kids are surrounded by things that bring them joy and, of course, love and support. 

 Relax, Unwind, and Get Back to Your Routine  

 The last bit of advice should be the easiest, and that’s to get back to your everyday routine. Some people enjoy finding a new rhythm, but that’s entirely up to you. Take some time to get used to your new surroundings, filling your space with things that bring you joy. Whether decorating your rooms with unique plants, colorful rugs, or decorative pillows, your new house should be your sanctuary, so making it feel and look like home is all a part of the fun. Set some time to unwind because you deserve it! 

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