Archives for March 2017

By Joe Szabo, Scottsdale Real Estate Team

For years we’ve seen the shift in Baby Boomers ditching their large suburban homes for the excitement of urban life. And we’re noticing the reverse from millennials: leaving behind small spaces along with the hustle and bustle of the city.

They’re open to a new world of suburban living, with single-family homes, more storage and closet space, and some outdoor space all their own.

These millennials, born between the mid ’80s and the late ’90s, came of age in a shifting cultural and social environment. Their experiences aren’t the same as their Baby Boomer parents, and as such, their preferences differ from those of their parents, who bought a generation ago.

Here are some real estate considerations to help you sell to millennial buyers.

Millennials are busy

Today’s young people work long hours, and they want to spend the free time they have with friends and family.

They’re also more transient than their parents’ generation. So, when it comes to real estate, many of them seek turn-key homes for quick and easy move-in. They can’t fathom taking the time to undertake renovating a bathroom or kitchen.

No matter how great the opportunity, many of today’s buyers aren’t interested in painting or “making it their own” as our parents did when they moved into homes they planned on living in for 30 years or more.

Home searching is like dating

Millennials grew up attached to their phones. They hail a car and order food with their fingertips. And now, instead of meeting at a bar, they date with their thumbs. Swipe left for the potential mate, or reject them by swiping right.

When it’s time to buy a home, their experience is much the same, thanks to smartphones and real estate apps. As a home seller, you and your agent must invest an incredible amount of time and money on your home’s photo shoot. If you don’t, you may never get a first “date” with your prospective suitor. If the buyer isn’t drawn to your photos, they’re on to the next place.

Bigger is no longer better

In the ’80s, a McMansion with quadruple master closets, oversized Jacuzzi tubs, formal rooms, and large basements were a sign of success, and coveted by home buyers.

Today, millennials want smaller and simpler homes on smaller parcels. Bigger houses or any land more than half an acre equals more work and maintenance to these first-time buyers, accustomed to the easy life.

You can’t make your home smaller, but if you are serious about selling and want to account for this trend, your price will need to meet the market.

Location matters more than ever

Millennial buyers want the urban experience, as best as they can get, in the ‘burbs. This means homes that are walking distance to a village or town, near the train, and in bustling neighborhoods are among the most popular.

While being away from town, secluded, and with more land was a status symbol in the ’80s, it’s a deal killer today. Unfortunately, you can’t move your home to a better location — but you can adjust your price to meet the market.

If you’re a Boomer selling a long-time family home now or in the future, and the millennial is your potential buyer (think: customer), you need to adjust your mindset to meet theirs. You can’t assume that anything related to your original home search applies today. Get ahead of it, or your home may spend many months (or even years) on the market.

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team

Sun rooms, solariums, skylights — oh my! While the terminology can be confusing, these rooms designed to offer indoor sunbathing have similar qualities, and are great for any type of home environment.

If your climate doesn’t offer year-round sun, you can still enjoy the outdoors by adding a sun room or solarium addition to your space.

What’s the difference?

A sun room is a home addition made completely of windows, which offer a 360-degree view of the outdoor scenery without stepping foot outside.

The term “sun room” usually means a room made of glass, and it’s commonly interchanged with conservatory, solarium, greenhouse, and atrium, among others. Technically, a sun room is any large room that allows the light to pour in through large windows or glass walls.

A solarium, on the other hand, is a more specifically designed room. To be considered a solarium, the space must also have a glass roof in addition to a wall of windows or glass.

Traditionally, solariums were built as part of hospitals to allow patients to soak up the sun without being exposed to the outdoor elements. Solariums can be attached to the home or stand as a separate structure altogether.

Check out these gorgeous sun rooms and solariums, and get inspired for a sunny space of your own.

Bright meets sunlight

This bright and spacious sun room lets the light pour in while still maintaining a homey charm. The woven furniture and floral-patterned cushions add a touch of whimsy, while the serene outdoor views provide a tranquil environment for afternoon tea or family game night.

Safely sunbathing

This sunny haven in Pensacola, FL is a modern solarium structure that offers privacy between spaces while letting in plenty of light. The iron frame and tinted glass allow the homeowners to enjoy the sun but avoid harmful rays and heat.

Eclectic outdoor living

Upbeat and contemporary, this sun room features French doors, exposed brick, and bright lime-green paint to add an eclectic touch to a traditional space. Palm Beach-inspired furniture and natural elements, like stone and grass, are sprinkled throughout to bring the outdoors in.

Room with a view

Boasting sky-high views and traditional architecture, this solarium in Friday Harbor, WA shows how outside structures can flow seamlessly to the indoor space. With area rugs and overhead lighting, the solarium feels like a light and bright living room that’s ideal for entertaining.

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team

If you’re a first-time buyer who just nabbed your first place, you’re likely in one of the scarier places in the real estate transaction. Before choosing paint colors, you’ll need to inspect.

If you’re feeling nervous, you’re not alone. The property inspection is one of the most important parts of the home purchase process, yet many buyers don’t know what to expect.

Here’s a guide to the roles and responsibilities each of the players has during a typical property inspection.

You, the buyer

You’re there to learn as much about the property as possible. But you should have already done your homework before the big day.

Before the inspection, review the seller’s property disclosures or building department documentation you received along the way.  The listing agent may have pointed out some known issues. Write down a list of questions or concerns you have about the home.

Block out a few hours on the day, depending on what you need to inspect.  Ask your real estate agent which inspections are typical in your market. Most inspections go smoothly, but some can be the beginning of tough negotiations.

The buyer’s agent

Your agent should be standing by your side to walk you through the inspection.

Good agents have been through dozens of inspections and know the drill, what to look for, and, most importantly, what’s important and what matters in the big picture. Cracked grout in the bathtub tile doesn’t matter when you have a safety issue with the electrical panel.

The listing agent

In some parts of the country, the listing agent won’t show up. But in others, they are present to represent the seller. After all, it’s their home you’re inspecting.

An intelligent listing agent will be front and center as the eyes and ears of the property inspection because they are the most familiar with the property, and are there to address any issues that come up.

For the seller and the listing agent, the inspection is one of the last hurdles to get through, and a big unknown. Issues, questions or concerns could arise during the inspection, which could kill the sale or affect the property’s value.

Though the listing agent is there to be an advocate for the seller, everyone should come with the same goal in mind: to facilitate a clean sales transaction.

The inspector

As the buyer, you hire the property inspector, who should be licensed by the state. You sign an agreement with and pay the inspector. Most buyers get a referral for an inspector from their real estate agent.

The inspector is not a contractor, though some inspectors were contractors in their previous careers. While they may be able to shed light on what you can or can’t do to a property and its potential costs, their objective is to inspect the property, its systems and the overall state of the home.

A good inspector will remain impartial and not be an alarmist, though they will point out concerns that need to be addressed. The inspector isn’t a part of the transaction, and shouldn’t get into the nitty-gritty of your deal — nor would they want to.

The inspector should look around, make notes and provide you with a detailed report as well as some feedback on future maintenance.

Be sure to walk around with the inspector. Get on the roof, go into the basement, venture into the crawlspace. It will be helpful for the inspector to point things out to you in real time and demonstrate where the systems are and how they work. Also, some things are better understood in person than read about in a report days later.

Your Uncle Bob

Finally, it’s important to comprehend why having Uncle Bob, a handyman or an electrical contractor on hand during the inspection is a bad idea.

While it may seem logical to bring a relative or close friend who is a contractor, be mindful that these people aren’t licensed property inspectors. Sometimes, the most well-intentioned people will end up causing harmful consequences.

Uncle Bob may feel it’s important to point out as many negative things as possible, just to seem helpful. He’s far from impartial, however, and hasn’t been a part of your home-buying journey or recent negotiations. You run the risk of raising unnecessary red flags.

Time for a huddle

After the inspection, you and your agent will likely huddle to talk about what went on and to strategize next steps. Hopefully, the inspection was flawless, and you’re one step closer to picking out your new paint colors.

If not, you may need to do more negotiations after the inspection. Hopefully, the inspections weren’t so bad that you walk away. But sometimes it happens.

Either way, it helps to know what to expect going in and to prepare for anything.

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team

Rates are up .5 percent so far in 2017, and could go higher. This raises the question of whether it makes sense to buy your rate down to control your mortgage costs. Let’s review the market outlook, then answer the question.

Where are rates headed from here?

Rates are tied to daily trading in mortgage bonds, and rates rise when bonds sell on improving economic sentiment — this has been happening in 2017.

Concurrently, the Federal Reserve controls short-term rates in the economy using overnight bank-to-bank lending rates. They hike these rates when they believe the economy is improving. Even though mortgage bonds represent longer-term rates, these Fed hikes still fuel selling of mortgage bonds, pushing mortgage rates higher.

The Fed began hiking rates in December, and has indicated continued hiking if economic data stays positive. Their next three rate policy meetings are March 15, May 3, and June 13.

Mortgage rates will rise as the Fed’s economic tone becomes more optimistic. The Mortgage Bankers Association calls for rates to rise about 1 percent in 2017 versus 2016, and we’ve only seen half of that so far.

With many signs pointing to higher rates, let’s address the rate buy down question.

What is buying down my rate?

“Buying your rate down” or “paying points” means you’re paying an extra fee on top of standard loan fees like appraisal, underwriting, and credit report to get a lower rate.

If you were getting a 30-year fixed loan of $325,000, you might get two options with and without points. Today the option with zero points might show the rate as 4.25 percent, and the option with 1 percent in points — equal to $3,250 — might show the rate as 4 percent.

Paying $3,250 at closing to lower your rate by .2 percent lowers your payment $42 per month, and lowers your interest cost $68 per month.

How do I calculate if I should buy my rate down?

To determine if you should buy down your rate, calculate how long it takes your monthly interest cost savings to repay the cost of the points. In our example, we divide the $3,250 you’re paying at closing by the $68 in monthly interest cost savings, showing it takes 48 months for the interest cost savings to repay the points.

If you’re going to live in the home longer than four years, then paying the points makes sense. Note, however, that it doesn’t make sense if you’re getting a 5-year ARM instead of a 30-year fixed — because the 5-year ARM would adjust to a higher payment just one year after you broke even on buying your rate down.

What are the dangers of buying down the rate?

Work with your lender to calculate how long it takes interest cost savings from paying points to repay the points. If you’re in the home (or the loan) longer than this breakeven timeline, you won’t lose money.

But if rates drop after you pay points, your risk is that you’d need to spend money on a refinance to keep you in the market, but that refinance cost could come during the time you’re still waiting to break even on the points you paid.

Given the rate projections noted above, that risk is low for now.

What if I need to buy down my rate to qualify?

Rising rates make your payment higher, which reduces your affordability.

Lenders allow you to spend up to 43 percent of your income on housing and non-housing bills each month. If rising rates don’t push you over this threshold and your budget is still manageable, you can proceed.

But if rising rates push you over this qualifying threshold, you don’t have to rely solely on buying your rate down to qualify.

You can also reduce your purchase price. Or if you don’t want to resort to that, the smartest way to qualify is to find other debt to trim.

How do I know if a rate buy down is being disclosed to me correctly?

Federal law requires lenders to give you a disclosure called a Loan Estimate within three days of a complete loan application.

The Loan Estimate’s second page shows Points in the top left section called Loan Costs. This will show the exact percentage of the loan amount for any points being quoted. It also shows the dollar amount of the points.

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.

By Joe Szabo, Scottsdale Real Estate Team

“Nobody cleans their bathroom like that, even on a good day.”

You may have a thought like this while receiving advice from a professional stager — someone who whips homes into tip-top selling shape.

But potential buyers will look upon those expanses of blank, clean counter space and picture themselves — along with their soap and lotion and comb — inhabiting it. Hopefully, they will muse, “I can see myself brushing my teeth here.”

Anything that interrupts their reverie, as they move from the foyer to the kitchen to the bathroom, is an obstacle to a potential sale.

“You want [your home] to be as austere as possible,” said Meridith Baer, who stages for the stars and a host of other clients in California, Manhattan, the Hamptons, New Jersey and Florida.

“The main thing is, you don’t want to distract the buyer,” Baer explained. “You want them to come in and fall in love — just kind of wander through the house and say, ‘Yeah, yeah, I can do this.’”

Her advice extends beyond sellers’ austerity, of course. Southern California is packed with Baer’s moving vans, delivering staging furniture and accessories to homes that are about to go on the market.

The staging maven offers the following simple rules for all sellers, including those who do not want or need the full treatment.

No big projects

“The first mistake a lot of people make when they get ready to sell is, they decide to redo the kitchen or do some elaborate remodel,” Baer said. “When I bought my home [in 2000], the people I bought it from had just redone the kitchen, and the first thing I did was rip it out. I hear that story all the time.”

Tastes vary so widely, you can’t anticipate what a buyer might want in terms of color, appliances, or even where the kitchen should be.

“My recommendation is to not spend that money if you’re sure you’re going to sell” soon, Baer said. Some buyers might want a price reduction to cover the cost of a remodel — but they might not, and in any case, you will save yourself a lot of time and hassle.

Paint it neutral (or apricot)

“The best spending anyone can do is paint,” Baer noted. “It’s something I would do if I were going to sell my house.”

Fresh paint makes a good impression in general, and neutral colors are best — whites, creams and palest apricot, which is “pale, but gives a bit of a glow.”

While gray has made a comeback in home decor, it won’t match everyone’s furniture, Baer said.

The power of the throw

Another low-cost staging trick involves throws and throw pillows.

“Even if it’s older furniture, as long as you simplify it and make it look seamless, it works well,” she said.

Tie the furniture together with throws and throw pillows in matching colors and patterns, and you could save yourself the price of a new sofa.

“I don’t think there’s any point in buying a new sofa unless you know where you’re heading and what kind of sofa you’re going to want,” said Baer.

Downplay your personality

Unless your personality is beige, remove it from the premises.

Buyers are distracted by family pictures and unusual artwork that are clearly not their own. They also can lose their ability to dream about living in your home if the closets are bulging with clothes or your dirty laundry is visible.

While you’re at it, put away jewelry and medication, too. They have been known to disappear during showings.

Pack early

Between clearing out junk and removing aesthetically distinct pieces, you probably will end up packing early for your move.

Baer recommends boxing up everything and leaving it in the garage — or, better yet, in temporary storage. Some companies will deliver a container to your door and store it for safekeeping until you’ve moved.

While you’re thinking about safety, consider putting a pad under rugs that slip. These days, it’s a better investment than baking cookies just before a showing. The cookie trick has been overdone to the point of seeming forced, Baer said.

You could also install the slip pads, then celebrate your home’s future sale by baking cookies and eating them yourself.

Please note that this Scottsdale Real Estate Blog is for informational purposes and not intended to take the place of a licensed Scottsdale Real Estate Agent. The Szabo Group offers first class real estate services to clients in the Scottsdale Greater Phoenix Metropolitan Area in the buying and selling of Luxury homes in Arizona. Award winning Realtors and Re/MAX top producers and best real estate agent for Luxury Homes in Scottsdale, The Szabo group delivers experience, knowledge, dedication and proven results. Contact Joe Szabo at 480.688.2020, [email protected] or visit www.scottsdalerealestateteam.com to find out more about Scottsdale Homes for Sale and Estates for Sale in Scottsdale and to search the Scottsdale MLS for Scottsdale Home Listings.