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Joanne Bernardini's Blog

By Joanne Bernardini | Agent in Ocean City, NJ
  • Renovating to Sell? Don’t Skip the Permits!

    Posted Under: Home Selling in Ocean City, Remodel & Renovate in Ocean City  |  August 22, 2011 10:50 AM  |  681 views  |  No comments

    If you are preparing to sell your home and have some remodeling on the to-do list, it may be tempting to skip the step of getting a permit. Think again! This could cause you a lot of problems in the long run.  While you may go undetected at first, you may be putting your sale and yourself at risk.

    Permits are usually not difficult to obtain and the fees are usually reasonable. There is generally a minimum issuing fee in the $25-$50 dollar range and sometimes an additional fee for the needed inspection.  Each municipality is different. For safety make the call to find out the fees. Ultimately, the purpose of the inspection is to make sure the renovation job was done correctly and that it meets all safety codes.

    Do-it-yourself workers, who side step the permit process can put their sale at risk later and can be putting the home in future jeopardy. An example of this is removing a wall, which is actually a load-bearing wall and not using the proper support materials to provide the needed support to keep the area above from collapsing at a later time. Electrical is another disaster waiting to happen if not done by a licensed electrician. A misplaced staple can cause sparking and smoldering in a wall leading to a major fire. Improper bathroom plumbing can cause a small water leak, which over time will rot the floor or walls. If the lack of permits isn’t discovered until after closing it can trigger a lawsuit by your buyers.

    When the home is sold the house inspector for the buyer can suggest the buyer’s request to see a copy of the permit for the renovation or advise them to check with the municipality to confirm a permit was issued for the work.  The buyer’s bank appraiser may also request to see the permits. ”If no permits are found and it’s obvious that the home has been renovated, the bank will likely refuse to make the loan, according to the American Bar Association’s book Legal Guide to Home Renovation (Random House, 2006).  ”If you are caught not having pulled a permit for the job you will have a major problem! You can face fines up to quadruple the original permit cost and be required to tear the project down and do it over. This can cause your buyers to walk.

    The moral of this story? Be smart do it right the first time! In the long run the small cost of obtaining the proper permit will be well worth the effort and prevent a slew of potential last minute headaches you don’t need as you try to sell your home in a difficult market.

  • Understanding the Short Sale Process

    Posted Under: General Area, Home Selling, Credit Score  |  August 9, 2011 7:31 AM  |  568 views  |  5 comments

    Most people have heard the real estate phrase "Short Sale" but don't understand what it means. Simply put a short sale occurs when an owner sells his home for less than what they owe the bank on the mortgage.

    The bank must be contacted and arrangements made in advance for the bank to accept the sale proceeds as payment in full for the debt owed by the seller. You must prove to the bank you can no longer afford to pay your mortgage. Common causes are loss of employment and medical catastrophes. Not all banks forgive the total amount that the seller is "short". That is why it is imperative for the seller to surround themselves throughout the process with knowledgeable people to help them understand this process and avoid the pitfalls.

    With proper help and negotiation, the seller may be totally relieved of their liability by the bank. The trend to “short sell" homes is on the rise as owners who have been caught in the crunch of falling home values struggle to keep their homes out of foreclosure.

    Selling a home through the short sale process takes longer than a traditional sale and at times can be very frustrating for both the seller and those attempting to buy the property. Although new rules have streamlined the process, it still can take 3 to 6months to complete. Even though the seller may accept an offer to purchase their home, ultimately it will be the bank that has the final approval over which offer it will accept.

    In the long run patience can pay off for both. The buyer gets a bargain on their purchase and the seller gets relief from the burden of supporting a home he can no longer afford. The seller will take a hit to their credit score with a short sale but not nearly as large a hit if their home is lost in a foreclosure.

    In a short sale the seller may be able to repair his damaged credit in as little as two years and be back in the housing market again. In a foreclosure it can take more than seven years. Since credit scores are used to judge a person's ability to pay their bills in everything from mobile phones purchases to home and car insurance rates, it is important to repair your score as quickly as possible.

  • What do Homebuyers Want?

    Posted Under: Crime & Safety, Home Buying, Home Selling  |  August 9, 2011 7:20 AM  |  471 views  |  No comments

    If you are thinking of selling your home, it is important to understand what criteria motivates buyers to select a particular home. Here are the results of a recent survey taken of home buyers! Although you can't change the location of your home, armed with this information, you will be able to better focus the items to address with your pre-sale dollars. 
Buyers were asked to rank the importance of their search criteria.

    Main priorities in selecting a home:
    Neighborhood safety was an important factor in choosing a home. Buyers judged neighborhood safety by the upkeep of homes and front lawns in the neighborhood, word of mouth reputation, and local crime reports and statistics. Besides neighborhood safety, respondents also ranked proximity to decent shopping and having a large backyard as important factors in selecting a home.

    Most sought-after features:
    Survey respondents said the most desirable features of a new residence are central air conditioning (87 percent); custom, walk-in closets (50 percent); and “top of the line” dishwasher and/or refrigerator (43 percent).

    Least sought-after features:
    The least desirable home features were custom window coverings, followed by an in-ground pool or spa.

  • Timing the Market to Purchase a Vacation Home

    Posted Under: Home Buying in Ocean City, Home Selling in Ocean City  |  August 5, 2011 5:31 AM  |  606 views  |  No comments

    Records breaking low mortgage rates are here. Average rates for a 30-year mortgage are now less than 4.5%! If you have been waiting on the sidelines for a good time to buy a vacation home at the shore now is the time! Homeowners that are anxious to sell have lowered their prices. Others are more willing to bargain in view of the large number of homes that are currently on the market. 

    Historically, when mortgage rates are low, home prices are higher. This is an unusual convergence of low mortgage rates and lower home prices. It is an opportunity to get that vacation home you've always wanted at a price you can afford. 

    If you haven't already done so, prepare your paperwork in anticipation of obtaining a mortgage.

    Some of the most important documents you will need to gather are:

    •                Previous two years federal tax returns

    •                Previous two pay stubs

    •                Bank statements for the previous two months

    Additionally, if you haven't already done so, get copies of your credit report from all three credit reporting agencies. Check each one for any mistakes that will cost you precious points off your credit score. This step alone can save you thousands of dollars. Remember, the higher your score the better the rate on your mortgage for the next 30 years!!

    Correcting these mistakes now will save you precious time when you are trying to meet the deadline for obtaining a mortgage within your contract of sale. With your financing in order, NOW is the time to take advantage of this economic climate and purchase your dream vacation home!

  • Is Summer a Good Time to Sell Your Shore Home?

    Posted Under: Market Conditions in Ocean City, Home Buying in Ocean City, Home Selling in Ocean City  |  July 29, 2011 8:25 AM  |  610 views  |  No comments
    I hear that question often. While it is logical to believe that people on vacation will fall in love with your city and want a place of their own, there can be some problems as well. Unless they have been seriously planning to do so, most people do not want to waste their beach time making appointments to see your home. Serious buyers may drive around and look at different neighborhoods on their own and then return in the off season to shop when more homes are for sale and easily accessible.

    If owners have taken advantage of the summer rental season to collect the high revenues the weekly rents will bring, it will be difficult for you to get an appointment. Few renters will agree to allow total strangers through the places they have paid good summer rental fees to occupy. This leaves you restricted to the change over time on Saturday. Usually between the hours of 10am and 2pm when the place is torn apart and cleaned for the next set of renters. One creative owner I encountered offered to give the renters back their weekly rental fee if the people that wanted to see the house actually purchased it.

    Although you can sell and buy homes all year long, in my opinion the best time to sell your home is in the "shoulder seasons" of the Fall and Spring. The selection is far greater, you are not dealing with the Holidays  and if you purchase you will be able to decorate and make it "yours" in time to use for the following summer season.
  • Problems of an "As Is" Listing- Part Two

    Posted Under: Home Selling in Ocean City, Design & Decor in Ocean City  |  July 12, 2011 8:42 AM  |  523 views  |  No comments
    Your bank account is low, you have to sell and you can't afford major renovations. How can you spruce up your home on a budget and make it an option in a  buyer's market?
    If you are willing to price it right and roll up your sleeves there's lots you can do on a budget to make your home more appealing to a buyer!

    Invite a friend to come over and be brutally honest with you. Prepare yourself that no matter what they say you'll take it as valuable and free information that will help you. Don't shoot the messenger! Have them walk through your home and write down comments as if they were a potential buyer. What do they see that you have become blind to? Review the list and separate it into things that are cleaning, and clutter problems and those that need some monetary investment.

     Here are a few potentials. If it's clutter, get rid of it. Be ruthless! Sooner or later you will have to pack it and pay to move it or toss it. Do it now and make your rooms and closets appear larger! Go through each room and look for fingerprints around light switches, door handles and switch plates and don't forget the mirrors!.You may be blind to these but your buyers are not! Get a spray bottle of cleaner and a white cleaning cloth and clean them. Colored cloths can stain your painted surfaces.  This is a great job for kids to help with. It will give the room a cleaner look and cost nothing!

     Are your curtains and drapes dated or damaged? Take them down! Clean the windows and let the sunshine in! Replace all burned out light bulbs. Brighter rooms can sell a home! For privacy you can install low cost blinds yourself, or replace the old drapes with light weight inexpensive white sheers.

     If purchasing a few low cost "bed-in-a-bag" sets on sale is in your budget, get one for each bed in your house. By getting neutral colored sets you will give the rooms a clean modern look and you will be able to take them with you to your new home. Make sure all the beds are made when the home is shown. If you have hardwood floors that are in reasonable condition and covered by stained, worn or outdated carpet, rip it up and clean the floor! When a buyers sees awful carpet the red light flashes as an expensive repair!

    How did your bathrooms and kitchen fair? Soap and water are cheap! Cleaning the appliances, cabinet fronts and floor until they sparkle are must beige's.  A new shower curtain in a neutral color and replacing the caulk around the shower and tub goes a long way to improve the look of an older bathroom.

     A buyer will look at the furnace and hot water heater. Clean the inch thick dust off the top and change the filter! It won't change their age but they'll be less likely to scream, "I need replacing NOW", to your potential buyers.

    If you have walls that are scuffed and chipped or are dark colors, you should repaint them. There are ways to shave some of this cost. Go to your local paint store and ask if they have a selection of "mis-tints". These are generally more expensive paints the buyers wanted in a very specific color and after they were mixed they weren't  just the right color the buyer wanted. You can generally get them for a few dollars a can. Look for light ,neutral colors or beiges and make sure you have enough to finish your project. You won't be able to match it. You can paint a complementary accent wall if necessary.

    In summary, if you are willing to spend the time you can change your buyers first impression from "NO" to this has potential!
  • How to Submit a Short Sale Offer

    Posted Under: Home Buying in Ocean City, Home Selling in Ocean City, How To... in Ocean City  |  June 14, 2011 2:24 PM  |  737 views  |  No comments
    First and most importantly, if you are are going to place an offer on property being sold as a short sale it is very important to make sure the agent you use to submit the offer is an experienced short sale agent. His/her experience in this process will be invaluable dealing with banks as the deal progresses.This experience can trim months off the process! Of course you must be prepared that a short sale can take six months to complete. Another critical factor is to avail yourself of the services of a good real estate attorney to review the contract and offer you sound legal advice. It is money well spent before you sign on the dotted line.

    An offer will look essentially the same as any offer except there will be  short sale addendum added to the contract that clearly states you the buyer, understand that the property is being sold as a short sale and the offer is subject to third party approval. This means that you understand that although the seller may accept your offer, it doesn't mean a thing unless the bank holding the mortgage approves of the sale price and terms of the offer. The bank can and frequently will reject the price, settlement date, and can even cut the commission rate that the realtors receive. This is one reason realtors avoid short sales. These deals are a lot more work and aggravation and in the  end the bank may cut the amount of money that the realtor will earn.
    If there is more than one mortgage or lien holder the process gets a lot more involved and can drag on. Ask before you make an offer, "Is there only one mortgage on the property?" If there are multiple, you may want to rethink if this is the right property for you. This deal could drag on for months as the different lien holders decide who will or will not have their loans repaid.

    Under the guidance of your lawyer,  build  safeguards for yourself into the offer. Proper wording is essential to get what you want.  A common mistake is to give a full deposit with the acceptance of your offer by the seller, as you would in a traditional sale. As the seller does not have the final approval, you could be tying up a large sum of money indefinitely in  escrow while waiting potentially months for the bank to approve the deal. It is safer to give a small deposit with the offer and state that the balance of the deposit will be given within 10 days of the banks approval of the short sale and acceptance of your offer. It also is an advantage to you if you set a specific date by which the bank must give you a decision and if it does not, you will have the option of canceling your offer and be entitled to a full refund of the deposit money that is being held in escrow. It doesn't mean you have to cancel, it just gives you the option. If a better home comes along, all of your money is not tied up for an indefinite time.

    Normally in a contract there are specific timelines for inspections that begin after the buyer and seller  sign the contract. It  is important to clearly state that the timing of the inspections begin after the bank approves the short sale and your offer. A lawyer will word it so that your right to inspections and acceptance or rejection of the results of the inspections is preserved but you will not incur the costs of the inspections until after the bank approves the short sale and your offer.
    If you will be purchasing the property for cash, make sure to provide a bank statement (with specific account numbers blacked) out proving you have the funds available to do this. This will be submitted to the bank with your offer and will save the time going back and forth when they have to ask for it. This is only one of a dozen things an experienced short sale agent will tell you to help trim time off the process.

    Do spend the time you are waiting to hear from the bank, lining up your mortgage and obtaining all documents that will be needed to get a firm commitment for your financing. Speak to your mortgage representative and tell them it is a short sale. Ask what documents will be necessary and have them together and ready to go when you get the good news your offer has been approved! The sellers bank may only give you 30 days to settle after their approval. You need to be ready to go then not just beginning the process. Ask your bank if you can submit the required paperwork for their preliminary review. They will tell you if you need additional documentation and you can be getting that to them as well! If you live within 5 miles of any body of water, ask your bank if they will require a new survey, and flood certification or if they will accept a re-certification to the new bank. This can save you hundreds of dollars. Do your cost comparison shopping for insurance coverages and pricing. This will not change much and will save you the time later. If it will be required, have a surveyor lined up. Additionly, get recommendations for home inspectors and termite inspectors call them and compare services and prices now so all you will have to do is call to make the appointment!
     The key to a successful short sale is working with experienced professionals who will look out for your best interests at every step along the way and patience. You will be rewarded with a good property at a great price! 


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