Author Archives: Stan McCune

Are interest rates about to go up? (Hint: Yes)

You may have heard an ugly rumor that interest rates on new home mortgages are going up soon. If it’s true, then it’s bad news for pretty much everyone as it means that homebuyers will have to pay more over the lifetime of their loan, and those selling their homes will now have to account for buyers who can’t get financing as cheaply as they used to be able to.

Well, I’ve got bad news. Rates are going up, according to the Federal Reserve of the United States.

 

But there’s no need to panic right at this moment. The rates aren’t going to go from 4% to 8% overnight. The Fed plans to raise rates slowly.

However, two things should be kept in mind. First, waiting too long to sell your home may work against you. Even if the fed raises rates slowly, they are still raising the rates, which negatively impacts the market. This means there will be less people who can afford to buy a home and less fish in the pond to sell your home to.

Secondly, because other sellers may be concerned about the rates being raised, this could result in a bit of a home sell-off in the upcoming months. That could have the result of there being more homes on the market than there are buyers on the market, and everyone’s homes may be devalued as a result.

The bottom line is don’t panic but also don’t wait too long to sell if you have a home you would like to sell in the near future. If you do decide to sell you home, consider filling out this form to let Upstate House Buyers take a look at it.

What happens when no one wants to buy my house?

Upstate House Buyers is frequently contacted by people all over the Upstate (and sometimes elsewhere in SC) who are trying to sell their homes. Usually, however, we are not the first people they’ve tried to sell to. Oftentimes, when someone contacts Upstate House Buyers, we will do some quick research and find that their home is listed online, and oftentimes their list price is similar to what they’re asking for us to buy it for.

Is that a problem? Maybe. The question is, why isn’t anyone willing to buy the home now and what needs to be done in order to make the home attractive enough for someone to buy it?

If the home is ugly, run-down, falling apart, etc. and all it needs is some sweat equity, then Upstate House Buyers would love to purchase it. Those are the types of homes that get us most excited. However, if the home is already in perfect condition and no one wants it, that means there’s only one way to sell it – lower the price, even if you think the price is already low.

“But,” you say, “Aren’t you one of those ‘we buy houses’ people who buy anything and everything out there?” Well, yes, we are. But this is our job, and as such, we have to make money doing it. If your home is already fixed up and in good condition, but you can’t find anyone to purchase it for $75,000, then Upstate House Buyers would not be able to purchase it for $75,000, otherwise, we would not make any money when we try to resell the house.

So make sure that when you are trying to sell your home that you look at it from the perspective of the buyer and ask for a price that makes sense both to you and to them. There are no charity buyers out there who are going to buy the home off of you even though no one else wants it for that price. However, Upstate House Buyers will do our best to give you a fair offer on whatever home you send our way. Just fill out this form to get started.

Should I sell my home on Craigslist?

Craigslist is an easy, inexpensive way to sell a lot of things, from old furniture to used cars. But what about houses? There are four questions you need to ask yourself before deciding if selling on Craigslist is the way to go.

1. Am I willing to sell this home for less than I think it’s worth? Let’s face it – Craigslist is not the place that people go to when they’re looking to pay top dollar. These are bargain hunters. These are cheapskate investors. These are people who can’t get bank financing and are hoping to be able to purchase a dirt cheap home without a bank being involved. If you think you’re home is worth $50,000, then a person on Craigslist will offer you $30,000. That’s simply the nature of the people who use that site, and it’s important to know that ahead of time. Which leads me to the second question:

2. Who do I hope will buy this home? If you’re hoping a wealthy, cash-buyer investor will see your home on Craigslist, odds are you’re going to be waiting a while. Most investors don’t spend time on Craigslist because there are so few deals that really make good business sense for them on that website.

If you’re hoping a buyer with good credit who can get good financing to purchase your home will see it on Craigslist, again you need to rethink things. For starters, most buyers with good credit are using realtors and looking at homes on the MLS, not Craigslist. But the other issue is that if a home needs work done to it, a bank is not likely to provide financing for it. The banks don’t want to see holes in the walls, stains on carpet, or heating/air conditioning issues. If they do, they won’t provide financing – simple as that.

That means, your audience on Craigslist is everyone else besides the wealthy investor and the well-to-do homeowner who needs a mortgage. Most of these people are those who don’t have a lot of money and have poor credit – is that who you are looking to sell your home to?

3. Am I willing to provide seller financing? This may be the most important question of all. Why? Because the vast majority of those who are going to contact you on Craigslist: a) don’t have much money, b) can’t get bank financing (due to bad credit), and as a result c) can only buy a home if they can get seller financing of some sort.

So if the answer to the above question is Yes, then maybe Craigslist is a good option. But if you’re hoping to get paid in full right away, you aren’t likely to get anywhere advertising your home on Craigslist.

4. Am I willing to deal with the hassle of Craigslist? Anyone who has ever sold anything on Craigslist knows what I’m talking about. It’s a HASSLE. Lots of phone calls. Lots of emails. Lots of showings. And no showings (“Oh, sorry – I thought I told you I was no longer interested and didn’t actually want to see your home today”).

Everyone sounds like they’re going to buy right away, and then nobody does. Remember, if they’re contacting you, they’re probably contacting a lot of other people about their homes too.

So what is my suggestion? Deal with an investor, like Upstate House Buyers who has the ability to purchase your home painlessly and quickly. If you’re interested in learning more, go ahead and fill out our “Sell Your House” form, and we’ll be glad to get in touch with you.

Help – I just got slapped with a HUGE non-resident fee!

There are two things we can always be assured will exist so long as humanity exists – death and taxes. Over the years, the government has found many creative ways to tax the people. It wasn’t that long ago that taxing people’s income in the US was unconstitutional, and now the income tax is a government staple!

But this post isn’t about trashing the government. This is about a special tax that the government (specifically state governments) loves to slap on people. That tax is known as the “non-resident seller withholding.”

Here’s how it works in SC.  If you sell a home in the state of SC but have your primary resident out of stateI (such as in Florida), you will have to pay a 7% tax at the time that you sell your property (5% if the home is possessed by a corporation). That’s as much as you would have to pay if you paid two realtors their full commissions!

No one will ever tell you this when negotiating with you, and guess what will end up surprising you when you get your closing documents? If you sell your home for $100,000, you will likely walk away with a maximum of $93,000. That’s a lot of money to unexpectedly lose just to the Department of Revenue!

So now what? Well, now you know what you’re up against, and you can keep these numbers in mind when negotiating. Upstate House Buyers always covers the property tax on a house we buy,  but we aren’t technically allowed to pay your non-resident tax. If you feel burned by this, we will try to work with you. We love working with non-resident sellers, and we want everyone to walk away from the closing table happy that they got a deal that they deserved.

Does only having one bathroom hurt my home value?

When people are looking to buy a home, there are a three pieces of information they always want to know: how much square footage there is, how many bedrooms there are, and how many bathrooms there are. A common misconception is that bigger (and more) is always better. That’s wrong – some people want smaller homes with fewer bedrooms to clean and worry about.

But what about bathrooms? Many homes only have one bathroom – is that a problem? Or, more to the point, if my home only has one bathroom, will it definitely sell for less money than a multi-bathroom home?

Not necessarily. The general rule of thumb is that a home you should have no less than half as many bathrooms as it does bedrooms. So a two bedroom home is fine to only have one bathroom, but a three bedroom home should have at least one and a half bathrooms (a half bathroom is one with a toilet but no shower/bathtub), and a four bedroom home should have at least two bathrooms.

However, many people have three bedroom homes with only one bathroom, particularly if the home was built 30+ years ago. Will having only one bathroom be a problem when the home is sold? In other words, is the lack of a second bathroom something that will cause the home value to go down?

The answer, generally speaking, is: yes – the home value will be diminished by the lack of the second bathroom. These days, if a person is looking for a three bedroom home, it is likely because they have children or plan to entertain guests. No one wants to have to share a bathroom with their entire family or with guests. It is inconvenient and can cause problems. Heck, when I was a kid, I didn’t even want to share a bathroom with my two siblings, let alone have to share it with my parents and any guests as well!

If you’re looking to sell your three bedroom/one bathroom home, you have essentially two options: a) sell the home for less than what it could be worth with multiple bathrooms, or b) have a contractor add a bathroom to your home in order to increase its value.

Adding a bathroom can sound appealing, but it has to make sense. The total cost of a project like that will likely be around $10,000-15,000 and there are usually risks involved. For instance, if your home is on a concrete slab, then the contractor will have to cut into your foundation in order to run plumbing to the new bathroom. That’s risky and could cause foundation problems to the home, which is every homeowner’s biggest nightmare. Additionally, there is always the possibility that adding the bathroom to your home will cost more than the increase in home value. This is where other factors, such as the home’s location, condition, and square footage play a large role. If you assume that spending $15,000 to add a bathroom will increase your home value from $70,000 to $90,000 but it only increases it to $80,000, then you are out $5,000. That’s a big problem.

That said, Upstate House Buyers loves to buy one bathroom homes. As of this post, we are actually working on a project where we are adding a second bathroom to one of our homes in order to resell it for the full value that we feel like it deserves. We understand how this process works, and so we are willing to take the risks that you may not be able to. So if you have a one bathroom home that you would like to sell, let us know by filling out our “Sell Your House” form. We would love tackle a new project.

How Much is My House Worth?

We all want to know how much our home is worth. There is a reason why home value websites, such as Zillow, are so popular. However, having already addressed in my last blog post how inaccurate Zillow is, it’s worth discussing the flip-side of things – how much is your house actually worth?

First, let’s think about the term “value” on a general level. Something’s value – what it’s worth – is only as much as someone is willing to pay for it. You might think your car is worth $15,000, but if you can’t find anyone to buy it for more than $10,000, then the real value is $10,000. It is no different with houses.

Here is a general rule of thumb – the only sure way to accurately appraise how much your house will sell for is to use this formula: the general value of homes in your neighborhood minus the cost of repairing/renovating your house minus 20-30% equity. Let’s break down the pieces of this formula.

Most people understand that their home value correlates in some way to the value of the other homes in their neighborhood. But how do you determine what those homes are worth? This is actually very simple – you just look at what the similar homes that are nearby to your home have sold for in recent months. For instance, if there have been four homes in your neighborhood that recently sold in the range of $70,000-80,000, then your home, after any necessary repairs have been done, is worth about that much.

However, that doesn’t mean that you can just sell your home for that price. You still need to factor in the repairs that need to be done on your home. Let’s say that homes in your neighborhood sell for $70,000-80,000, but your home needs $10,000 in repairs done. Here is the reality: no one is going to buy your house for $70,000-80,000 because after the repairs, they have paid more than what the home is worth!

Now, it’s worth mentioning that most people would not be willing to purchase your home with $10,000 worth of repairs to be done on it. Most homebuyers want you to do the repairs for them, and then they purchase the home after you do those repairs. But when it comes to the numbers, the end result is the same: if you do the repairs yourself, you may sell the home for $10,000 more but you will be out $10,000 from when you did the repairs. You lose out on the repair money either way.

There is one more consideration: equity. The days are long gone that someone is willing to buy a home for simply what it’s worth. Everyone these days understands that home values can plummet overnight, and they want to play it safe by getting a home with equity – in other words, purchasing the home for slightly less than what it’s worth. The general rule of thumb is if you want to sell your house fast, you should plan on giving your buyer 20-30% equity in the home. If you aren’t willing to give your buyer equity, there is a possibility that you may still be able to sell your home, but you can plan on having it sit on the market for a very long time (something I discussed in point #2 of this blog post), which I assume, since you are on this site, you want to avoid.

So let’s give an example. Let’s say your house is in a neighborhood that typically sells homes for $70,000-80,000. That means your home is worth about $75,000. But you also have about $10,000 of repairs that need to be done and about 25% equity ($18,750) that needs to be factored in. The real value of your home is approximately $75,000 – $10,000 – $18,750 = $46,250.

You might be thinking: “$46,250! That’s all I can sell my home for!??” In this case, yes – but if you were to sell your home to Upstate House Buyers, that number isn’t as bad as it may seem. With Upstate House Buyers, you don’t pay any closing costs, realtor fees, attorney fees, commissions, etc. – fees which can run into the tens of thousands of dollars – and you don’t even need to repair or clean your house. We will buy it as-is and take care of all the other expenses for you. (You can see a breakdown of how much money you could save by selling to Upstate House Buyers in point #5 of this blog post.)

The good news is that you can get a free evaluation and estimate of what Upstate House Buyers will purchase your home for by simply clicking here and filling out our survey. The worst thing that can happen is that you decide not to sell us your house – no harm is done to you or to us! So give us a shot, and let us know how we can help you.

How accurate is Zillow?

In real estate, the million (actually, more like billion) dollar question is this: how much is my house worth? Sites have popped up all over the internet claiming to estimate home values. Type in your address and – voila! – you have a neat and tidy figure for how much you should be able to sell your home for.

There’s only one problem, however. Those websites almost always are way off in estimating home values. Why? Because they don’t have any way of assessing what number of repairs need to be done on a home or, on the flip side, how many upgrades have been done. So one home that is literally falling apart may be next to another home that recently had $20,000 in upgrades done to it, and Zillow will list them as being worth just about the same amount, since the website’s algorithms don’t take those factors into account.

To illustrate the inaccuracy of these websites, I refinanced my mortgage last year and had to have an appraisal done on the property. An appraiser came out and walked around the outside and inside of my house taking detailed notes, and then did an extensive amount of research on the surrounding neighborhood that I live in to determine my exact home value. In other words, her appraisal was very detailed, and it needed to be, because that’s what the banks who provide the mortgages demand. So how close do you think her appraisal (taken just a year ago) compares to what Zillow currently says my home is worth? Zillow claims that my home is worth a whopping $38,000 more than what the appraiser concluded!

Now my home has probably gone up in a value a little bit over the past year, but I haven’t done $38,000 in renovations. The fact that Zillow would be that far off from what an actual appraiser concluded a home was worth is shocking to some degree, but again, those websites aren’t factoring in the inside of the home, which is the most important part! So we should expect them to be inaccurate.

Very few people are able to sell their home for the price that Zillow says they should. In fact, Zillow benefits from over-inflating home values because that will bring more people to the website to feel good about their home. It is a sad but very real reality, and if you really want to know what your house is worth, you should talk to someone who wants to buy it. Ultimately, your property is only worth what someone is willing to pay for it.

The good news is that finding a buyer is easy! Upstate House Buyers will evaluate your house for you and tell you what we would be willing to pay for it. Ultimately, your house is only worth what someone is willing to buy it for, and we would be glad to tell you what we will buy it for if you will only fill out a short survey on your house here.

10 ways to avoid being scammed when selling your house

Oftentimes, people who are trying to sell their house are desperate. Very few of us are in a position where it’s fine for our house to sit on the market for months or years without selling. As such, those of us who are trying to sell a house are particularly vulnerable to getting scammed. Scammers know that the best time to get to someone is when they are desperate and need money quickly.

I’m not suggesting that you could get scammed into losing your house. That isn’t necessarily impossible, but it would be difficult to do and most scammers are looking for quick, easy ways to con their victims. For instance, they could get you to share personal information that gives them access to your bank accounts or to other sensitive information. They could also do something very simple (but frustrating for you) such as take your address, email address, etc. and sell it to other scammers to bombard you with scam materials.

Whatever it is that the scammers are after, you want to try to avoid them at all costs. As such, here are ten questions you should ask to ensure that you don’t get scammed when dealing with someone who wants to buy your house:

  1. Do they have a website or place where I can find clear, concrete information on the people I’m dealing with or with their business? This one is important because most scammers try to fly under the radar. If they do have a site, that site will usually have very little content about what they actually do and will focus more on getting your sensitive information, such as a social security number or credit card.
  2. Am I able to speak to someone over the phone or do they insist that I text or email only? Scammers don’t like to talk on the phone because the person at the other end might be able to identify by their tone of voice that they aren’t legit. As such, they will try to limit this type of communication for electronic means at all costs.
  3. Are they operating a real business or is it just one person who isn’t willing to disclose his motives for buying my house? Each state has a way of looking up businesses online, and you can verify there if a business is real or not. The state of South Carolina has its database of businesses here, and that is where Upstate House Buyers LLC is listed.
  4. Do they immediately ask for sensitive information rather than for the usual information that a house-buyer would be interested in? Sensitive information includes: social security numbers, bank account numbers, credit card numbers, etc.
  5. Do they want to buy my house without ever seeing it? This is a big red flag – no one should legitimately be willing to buy a house without looking at it first. If they tell you that they are willing to buy it without ever seeing it, don’t take the bait.
  6. Do they want me to send a wire transfer/check/Paypal to close the deal, with a guarantee that they will send me their payment via wire transfer/check/Paypal shortly thereafter? This is a very common ploy. In this tactic, the scammer will insist that you will get paid a certain amount of money but that he needs you to pay some money first. When dealing with real estate, he may claim that the money you owe will cover closing costs, and that he will repay you the full amount that he owes you after he receives your money. The only problem is that once he receives your money, you will never hear from him again.
  7. Do they try to purchase the house without anything official in writing (such as a contract)? Since scammers try to fly under the radar, they don’t want to mess around with contracts or other documents that could get tracked back to them (or make it obvious that they are scamming you). More often than not they will try to get you to agree to things through emails without real signatures or text messages.
  8. Do they have a mailing/postal address (or a PO Box)? There is nothing a scammer hates more than having a mailing address, since mail is run by the US government and having an address or PO Box means their scam could be traceable by law enforcement. If the people you are dealing with don’t have a place where you can send them mail, you should be concerned about their legitimacy.
  9. Have they clearly invested in their business or do they not have much more than a phone number and a generic email address? Scammers typically don’t spend a lot of money crafting their schemes. They want to get money (from scamming), not spend money on things like marketing materials, etc. that could ultimately track a law enforcement official to their doorstep. As such, most scammers will not have professional business cards, marketing materials, websites, etc. They will likely keep these things to a minimum and have very little noticeable infrastructure to their “business.”
  10. Are they able to provide references, if you ask for them? A legitimate real estate investor will have people who can vouch for his legitimacy. If not, he is likely trying to pull the wool over your eyes.

Upstate House Buyers is a legitimate business registered with the state of SC. We pride ourselves in honesty and transparency and want all parties that we work with to have the sense that we are reputable and truthful. If you have any concerns about this, we welcome for you to check out our FAQ page to answer any questions you may have. If still not satisfied, please contact us and let us know your concerns, and we will do our best to answer them and alleviate your concerns.

What happens if I foreclose on my mortgage?

Foreclosure isn’t fun for anyone. Having creditors call you and show up on your doorstep to tell you that you may lose your house is a nightmare for the average American. But the worst part is what happens after you lose the house – when the banks see to it that your credit is destroyed.

What do I mean? When you foreclose on a mortgage, that foreclosure is listed on your credit score, and it is the worst thing that can appear on your credit apart from a bankruptcy. There are numerous serious problems that result from having your credit damaged in this way:

  • Inability to open a new mortgage to purchase another home
  • Rejection from being able to rent a home, once the property manager sees your credit score
  • Inability to obtain credit cards or to lease or obtain a loan on a car
  • Once you are cleared to obtain a new mortgage (and most other loans or lines of credit), your interest rates will be significantly higher than the rest of the population and you will have to put down a higher down payment (probably around 20%).

The average length of time it takes for your credit to heal after a foreclosure is seven years, and that’s only if you do everything perfectly (i.e., keep up with all you credit cards, etc.) during that time.

Foreclosure is a serious problem and no one wants to end up living with their in laws because they can’t rent an apartment or get a mortgage. A better option is to sell your property to an investor, like Upstate House Buyers,  before foreclosing. We can buy the house quickly and renegotiate things with your bank to get you the best possible deal. Then you can move forward with your life, knowing that you won’t be in the credit doghouse for the next seven years.

If your mortgage is in trouble and you risk foreclosure, why not take a second to fill out our online form and let us contact you to discuss purchasing your home? Just taking those few minutes could save you years of hassle and heartache.

Should I sell my house through a real estate agent (realtor)?

Many realtors are good people, and they serve a very valuable role in the world of real estate. However, for many people looking to sell a house, using a realtor would be a mistake. Consider the following questions:

  • Do you need to sell your house quickly?
  • Do you want your final transaction to result in no costs out of pocket for you?
  • Do you want to sell your house in a way that is simple – no constant stream of visitors showing up to look around, no lengthy book of paperwork to be signed, no headaches of dealing with banks, etc.?
  • Does your property have a lot of repair-work and/or cleaning that needs to be done on it for it to be livable or sellable?
  • Do you want to cut out commission fees and make sure you get 100% of your final sale price?

If you answered yes to any of those questions, you do not want to sell your house through a realtor. The reasons are simple. When you go through a realtor, they have to spend quite a bit of time gathering information on you and the property. If the property is in bad enough shape, they may not even be interested in listing it for you (it does cost them some money to list it; so you can understand why they might be picky). If they do decide to list it, they will expect you to get the home in good condition (both repaired and cleaned), and then they will put it up on the MLS home database where people will eventually start looking at it and contacting your agent to try to visit the property. Likely you will have numerous visitors and most of them will walk away from the house with a “problem” that was a deal-breaker for them. Eventually you may find a person who likes your house and wants to purchase it. But this person likely has to get financing from a bank, which means now the bank has to appraise your house and give approval to the buyer that they will finance it. This process can take weeks and frequently results in the buyer getting rejected for financing, at which point you would have to go through the process all over again. If you do finally endure the months (and sometimes years) of hassle and get to the closing table with a buyer, you will lose out on at least 6% of the final sale of the transaction (possibly more, depending on how much negotiation the buyer did with you on closing costs) – the 6% goes to your agent and to the buyer’s agent as compensation.

Compare that process to selling your house to an investor, such as Upstate House Buyers. If you sold your house to us, you would deal with one primary person (Stan McCune) and he would handle all of the ins and outs of the transaction, from making you an offer to providing you with the simple paperwork for the contract. When you close, you wouldn’t be dealing with banks, brokers, or realtors all getting their slice of the pie through commissions. What you agreed would be the selling price of the home is the amount of money you would get on your check when you walk out the door after selling the home, and you would not have to pay any closing costs. From start to finish, the entire process can take as little as one or two weeks.

Interested in learning more? Why don’t you fill out our online form to tell us more about your house and we will contact you to discuss your options.