3 Ways Pest Infestations Can Affect the Price of a Home

House pest infestation is a huge deal in terms of taking care of the family’s overall health and wellness. This is because having any type of pests that thrive in home can cause a number of diseases, especially to children who aren’t yet aware and protected from of the dangers these animals can cause them.

For instance, German cockroaches in the home are both repugnant and unhealthy.  Research has shown that children growing up in homes with German cockroaches are more likely to suffer from allergies and asthma.  In fact, their droppings and shed skin can carry certain pathogens and can cause certain allergies.

The threat to any family’s health is just the tip of the iceberg.

Aside from the harmful effects of having these pests live in and out the house, they also affect the house itself – the aesthetic value and livability of any human living space is diminished by the presence of these unwelcome guests. Thus, selling an infested house is extremely difficult.

Pests at home greatly influence the price of the property for sale. Find out what are the negative effects of these unhealthy and unwanted critters to the price of any house on the market.

Structural Damages are Inevitable

Pests at home can be a primary source of structural damages at home. The perfect example is the carpenter ants. This type of ants is one of the most destructive ant species known to man. Carpenter ants generally target already-weakened wood where they can do more damage. While they don’t eat wood, they can chew through almost any natural material (i.e. just like the wooden structures of your home) and create a series of tunnels. They use these tunnels to form a nest, which they can run from towards any part of the house, like the pantry, dining area and the kitchen.

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Rodents are also suspects for destruction of one’s home. These animals have been known to gnaw on the house’s electrical wiring and pipelines. When they reach a water line and have chewed a hole in it, water could leak out, damaging property and potentially leading to a flood. Moreover, depending upon the pipes they have damaged, one’s home could experience a gas leak, or the sewage system may break.

As rodents can chew on any material, no area of a home is safe. Along with wires and pipes, mice and rats may also go after furniture, sheetrock, wood, and foundation – high-priced items that could be permanently compromised.

Termites have proven to be yet a different type of pest. According to the National Pest Management Association, termites cause over $5 billion in property damage annually throughout the U.S. Extensive termite damage can make floors or walls sag due to loss of structural integrity.

Overall, this is a hard catch for any potential seller and buyer. A seller would have to repair the damages these pests did. This could eventually lead to having the price increased in order to even out the house repair investment. A potential buyer would obviously say no to a house that’s crawling with critters inside. This is why professional pest control services like those provided at smoothquotes.com can help a lot. They can ensure skilled contractors at reasonable prices.

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Its Aesthetically Challenging

Obviously, structural damages at one’s home can be a reason for a home to become less appealing to anyone who’s looking to buy a house. Adding salt to the wound, having dead bugs line window ledges, the attic, and the basement can surely fend away any potential buyer as it is classic evidence for an infested home.

Generally, small holes in the walls, on the floors, and all around the house are signs that a house is infested. Burrows in garbage areas and weedy spots near the property are also a bad sign. Rats love to gnaw on things, and finding little gnaw marks can be a sign of an infestation. It is important to remember that buyers would want to do a full inspection of the place, and each detail will definitely be noted.

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In addition, rats and mice tend to travel the same paths every day, and can leave trail marks along the way. Rats run along the walls, and can leave dark grease marks. Fecal droppings, urine trails, and footprints through dust paths may also be seen. Evidently, this picture is simply not too pleasing to the eyes.

As much as pets can be a problem aesthetically, pests also give off certain odors that are unpleasant. There are certain recognizable smells that pests give off. Experts claim that bed bugs have a distinct, musty odor, while mice tend to give off a stale, urine smell that’s similar to ammonia. As for roaches, they have been said to have an “oily” odor.

The bottom line is that the first thing a potential buyer looks at is how a home appeals to them. This first impression is very important in any probable deal. It is safe to say that when a house is not good in terms of aesthetics, and does not appeal to a potential buyer visually, it is be harder to sell. Thus, when it’s harder to sell, there is a tendency for sellers to lower the property’s price, making it harder to get back the money invested in the first place.

Home Insurance Does Not Cover Damages

The staggering thing about infestations is that they are not covered under homeowner’s insurance, and the responsibility for cleanup falls under normal house maintenance. In fact, most insurance policies exclude a number of pests that are common at home, listing the following animals and insects in the exclusion — “bats, rats, mice and other rodents, bees, termites and moths, vermin, birds, fish, reptiles, insects and spiders.” What these insurance companies are inferring is that pest control is an owner’s problem and responsibility.

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Why don’t the homeowners’ insurance companies cover infestations and in some unfortunate cases, deny claims for property damage done by pests? One issue is that it’s hard to determine how much damage an infestation can cause, and a great deal of it has to be related to the property owner’s lifestyle.

For the average homeowner who catches an infestation before it’s multiplied, such exclusions have never been a problem. However, many people don’t learn about the exclusion until it’s too late and when there’s a lot of money on the line. Homeowners who have just caught an infestation usually don’t immediately think of their homeowners insurance — it’s those who learn the costs of extermination who call insurers.

That’s under the deductible amount of most homeowners insurance policies. $10,000 for pest control and extermination? Time to call the insurer. However, most insurers would think the homeowner with the $10,000 claim likely missed an important step in trying to eradicate the pests, or just outright wasn’t performing preventable maintenance.

How does their bill get that large? Insurers know that most of the time, when somebody has a large “extermination claim,” it isn’t a pest problem that just popped up yesterday. It is assumed that there had been enough time for the growth of the infestation, thus enough time to work on the problem in the first place.

If a new owner has already moved in, and there’s an infestation, he or she has to spend money for extermination. Obviously, that’s a bad deal for any buyer, so the tendency is to up the original price range and include the price for extermination. All in all, that’s a hard deal to sign on in terms of the property’s price.

6 Ways To Improve the Resale Value of Your Home

By doing simple upgrades to your home, you can look to re-sell it at a much higher rate. Here are some simple ways to improve the quality of your home so that its resale value can be through the roof.

  1. Nice Kitchens Add Value

Buyers of all kinds have long focused on the kitchen, but it holds particularly true to the newest wave of first-time homeowners – the millennials. A modern or updated kitchen topped the list of ideal home features in many surveys on millennials, who registered this part of the house as the most important. With more and more people going back to the basics of preparing their own meals, the kitchen deserves to be one of the prime features of any home.

With this in mind, if you plan to sell, don’t rip your kitchen down to the studs. A smaller investment can have serious impact. For as little as $5,000, you should be able to add a new suite of appliances, as well as a new countertop and flooring, giving you a much fresher, more coordinated look. Applying a new coat of paint to the walls or cabinets and updating the hardware can also breathe new life into the space.

For example, you can improve both the quality and aesthetics of your kitchen if you upgrade your appliances and try out stainless steel finishes. Though it has been around for decades, this appliance finish conveys a clean, contemporary design which tells your buyer subconsciously that all your appliances are modernized. For the latest spin on stainless products, look for new versions of black stainless steel from KitchenAid, LG and Samsung, each with a softer, less reflective finish, but the same cachet as the original.

  1. Pay Attention to the Landscape

Tangled trees and unkempt bushes can obscure views, darken interiors, promote mold and block a good look at the house. This, in turn, can be a major turn off for many potential homebuyers.

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People forget about their trees more than almost anything, yet landscaping is one of the top three investments that bring the biggest return. According to a 2007 survey of 2,000 brokers conducted by HomeGain, an online real estate marketing site, an investment of around $400 or $500 dollars in landscaping can bring a return of four times that amount. It could really make a significant difference in the price. It might cost you more in upgrading your home, but landscaping might just be that one thing you need to close that deal on the house.

  1. Make Your Home Energy Efficient

There’s a lot of consideration for potential buyers if the house that they look to buy is already energy-efficient. Lowering your home’s energy costs can save you money for as long as you live there, and it is expected to be a major selling point down the line. People, according to most surveys conducted by home brokers, look for energy-efficiency more than they look for safety.

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Older homeowners who have felt the sting of escalating energy costs tend to be driving the interest. However, there are some early adopters among younger buyers, too, especially in regions of the country with more extreme weather. If they can see that your appliances are tilted on energy saving, it’s a good sign for them. Also, oftentimes, smart buyers ask for previous electricity bills and judge how much they can potentially spend when buying the home. That being said, it’s best if you can start being an energy saver as soon as possible.

Of course, never forget about water heating, which accounts for 16 percent of energy costs in the typical home. Spending $1,800 to $2,400 on a new unit is another way to impress efficiency-minded buyers.

  1. Functionality Over Aesthetic

Stain-prone stone countertops, grime-collecting ornate cabinets, and dust-catching wall-to-wall carpet used to be symbols of luxury, but today’s homebuyers are more likely to equate them with extra work. The younger generation in particular would much rather spend their time entertaining at home than fussing over it.

This means that beyond a home’s cosmetic finishes, it’s important to keep the major mechanical systems in working order. Many first-time buyers may have used up much of their savings on the down payment, so they want to know that the heating system, plumbing and electricity have been recently updated. Central air conditioning is also in demand because it eliminates the need to switch window units in and out.

In addition to including the age of the system, it helps if you can also point to its reliability. For example, Consumer Reports surveys have found American Standard and Trane to be among the least repair-prone manufacturers of gas furnaces.

A new roof can also help prevent fears of water damage, ice dams, pest infestation and other home disasters that can result from an old, shoddy roof. For a typical 2,300-square-foot house, you might be able to put on a new shingle roof for as little as $6,000. You’d also need to make sure that your floor is built well (including the backyard or the parking space) so looking for good asphalt paving services should be on top of your list.

Furthermore, more carpets are being replaced with long-wearing hardwood flooring with a durable factory finish. Engineered wood flooring, which uses a thin veneer of real wood or bamboo over structural plywood, tends not to wear as well as the more solid alternative. It does have the same look but costs less, making it a good choice if you plan to sell soon.

  1. Investing in Smart Technology

High-tech features offer notoriously bad returns on investment because technologies tend to evolve quickly. For example, one of the biggest flops in recent years is the fully wired audiovisual system. That being said, you should be investing on smart technology – those kinds that don’t fall off easily – rather than simply the trending ones.

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Certain smart devices add to home value and interest, including programmable thermostats. It has practically the same benefit with a range of products, such as lights, door locks, and security systems. Those smart features have broad appeal with millennials who grew up on smartphones, so they’re used to being able to control things at their fingertips. Surely, their age group would pay three to five percent more if they can control everything with their mobile phone.

A whole house generator might also be a good investment. Power failures are a reality for a lot of homeowners. As such, stationary generators can usually power the entire property. A professionally installed unit can range from $7,000 to $15,000, according to Porch, a website connecting consumers with home service pros. The Generac 6241, priced at $3,500, excluding installation, is a top pick.

  1. Invest in Good Advertising and Photos

Lastly, to increase the value of your house, your overall advertisement should be crisp. The first step is to look for a real estate agent who can really sell houses. Then, make sure your real estate agent offers great photos that show your home in its best light when it comes time to list. With this, home buyers seeking for a new place can appreciate your home from the pictures online before even making a decision to visit.

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Look for a frugal way to get a good advertisement by hiring a photographer, or researching online on how to take good photos of your house. Time and time again, customers would always be attracted by the first impression, especially when your advertisement photos are really good.

8 Factors a New Real Estate Buyer Should Know

If you’re new to the playing field of real estate, buying a property might be an experience that could turn out to be a bit too confusing for you. As it is, it’s nothing like buying your favorite snack at a convenience store; it’s not just you giving cash in exchange for a house. There are many terms and conditions that you still need to understand fully before anything else. If you’re a new buyer – or a relatively new one – and wanting to lessen the cost on a property you desire, here’s what you ought to know:

Price

Of course, the seller wants the highest price they can get while the buyer wants the smallest price they can get. Buyers and sellers try to negotiate the best price possible for them. The thing is that that “magic price” is obviously going to be different for both parties.

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There’s nothing else to do than for both of parties to meet halfway.

Buyers don’t want to overpay or price themselves out of a resale in the future; while sellers want to make sure the deal makes sense and fits well in their financial plan. If you want to get the best initial price, you should have an idea of the pricing, then take into account the market situation, and other factors that might affect the price.

Closing costs

One thing that many new prospects in the real estate market take for granted is the closing costs. Closing costs are fees associated at the closing of a real estate transaction. The closing point is when the title of the property is transferred from the seller to the buyer. Closing costs are incurred by either the buyer or seller.

Buyers have to pay prepaid closing costs for their mortgage. This payment is for the money that the mortgage lender holds in escrow, for items like taxes and insurance. Usually, a buyer may ask a seller to pay a flat amount toward their closing costs, or up to a percentage for what’s an allowable contribution for the lender. Sometimes this can be up to 3% of what’s included in the mortgage.

What you can expect is that if a buyer asks the seller to make a concession on their behalf, they’re likely going to have to pay a higher asking price.

Closing date

Due dates and closing dates affect the monthly cash flow from the buyer to the seller. Also, sellers almost always negotiate for the best case scenario for themselves, like upping up the speed of when the money will be remitted to them. This might be a small factor, but something that you should still be mindful of.

The money involved in real estate is not that liquid in terms of free use or being able to be used in other engagements. Initially, the cash involved is further used in any remaining project development activities (i.e. documentation, final aesthetic touches and labor costs). In this regard, the closing date serves as a benchmark for both parties’ next steps.

Financing Contingencies

Financing Contingencies are clauses in a real estate contract that stipulate various conditions that must be met by the buyer and the seller for a sale to go through. For example, many buyers write into the contract that being able to close on the sale of their own home is a condition of the offer to purchase the new home. That way, if the sale of their own residence falls through, they are not obligated to go through with the purchase of the new property.

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If you’re a buyer competing with all cash offers, you need to figure out if they can drop the financing contingency. This can help shorten the closing time line. Buyers can do this by having their mortgage fully approved prior to making an offer. As such, the pre-approval shows that their finances are in order and they can afford the property.

Sale Leaseback

A leaseback is an arrangement where the seller of an asset leases back the same asset from the purchaser. In a leaseback arrangement, the specifics of the arrangement are made immediately after the sale of the asset, with the amount of the payments and the time period specified. Essentially, the seller of the asset becomes the lessee and the purchaser becomes the lessor in this arrangement.

Fortunately, a leaseback is neither debt nor equity. In fact, a sale leaseback is more like a hybrid debt product. The buyer does not increase its debt load but gains access to capital through the sale of assets. This is much like the corporate real estate version of a pawn shop transaction. The company goes to the pawn shop and in exchange for a valuable asset, receives a certain amount of cash. The only difference is that there is no expectation for the company to buy back the asset.

Additional Repairs

It is also often very helpful if you pay attention to the physical details of a property when buying a home, especially when there are things that need to be repaired. When a home is out-of-date with appliances that don’t work – cracked ceilings or pool foundations, for example – a buyer can ask for a lower price because of the cost to bring the home back to current standards. These factors can net you essential discounts.

This is why there are advertisements like “Need help selling my houses and I’m embarrassed. Get a cash offer.” In this case, professional realtors help those who want to sell subpar assets and are not confident enough because of some issues with their properties. Whether you are seller or a buyer, keep in mind that this type of unit tends to go for a lower price.

Furniture and Appliances

The previous homeowner’s personal property, such as chandeliers, window treatments and cabinets, should be part of the deal. Whatever is excluded needs to be stated when the contract is finalized. Sometimes, having furniture also grants you functionality that you didn’t know you needed, and can make you make the most out of your money.

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Meanwhile, the appliances should also be taken into account. The stove, dishwasher, microwave and any built-in appliances may come with the property. Again, these things should be included in the contract.

Home Inspections

There are many benefits to having a home inspection before you purchase a house. According to home inspectors, homes are sometimes not particularly well cared for by homeowners, who are slow to fix leaky faucets, replace heating or A/C filters, or clunky furnaces.

If properties with homeowners living in it can be uncared for, imagine what condition a foreclosed home can hide. For example, mold can grow if the water hasn’t been turned off, which renders the environment moist. If the home is boarded up and there is no ventilation for weeks or months, black mold can grow fairly quickly.

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Because of the importance of a proper home inspection, you should make the purchase of the home contingent on your approval of a home inspector’s report. When making a written offer for the home, simply make the home inspection a condition of the purchase. If your home inspection comes back clean, you can proceed with the sale with confidence. However, if the report is negative, you can reduce your offer, make the seller pay for any repairs, or even back out of the contract altogether.

The Art of Negotiation: How To Make It Big In Real Estate

More often than not, real estate transactions boil down to negotiation.

Sellers won’t give the lowest price any more than the highest paying buyers are willing to pay. If you’re a buyer and you want to get your dream house in Hollywood, you’ll need to negotiate. If you’re a seller and you want to sell your property in Texas, you’ll need to negotiate. Negotiation is part of a creative process, and here’s why:

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Negotiation is an Art.

It is generally wrong to pose an aggressive posture in any of your interactions with real estate agents, be it as a buyer or a seller. Contrary to popular belief of “you should be in a commanding position”, you actually should be easy to get along with and easy to talk to.

Then again, you should never forget that you are in that meeting or in that open house for one reason: to find the best way to address your real estate needs. This means that while you are negotiating the deal, every piece of information that you provide to the other side (to the buyer if you’re the seller, and vice versa) should be carefully released at just the right time, spoken in just the right way and designed to improve your position in the transaction.

Arguing over the asking price.

The “art of negotiation” is not just a simple isolated exchange between two parties, but rather a continuing effort. You must remember every action that you take during the entire transaction, beginning with submittal of offer to close escrow. Many real estate transactions where the buyer or seller got past the “offer and acceptance” phase and then acted like the deal was done, only to find themselves not having a deal because of cold feet.

As the saying goes, it ‘ain’t over till the fat lady sings. Thus, don’t give up your position too early: don’t make unnecessary concessions, and don’t compromise without gain.

Don’t be clumsy. You might insult the other party.

This is perhaps the main reason why many negotiations fail. There is an art to creating an offer to buy a home at the best price, and it’s not just about being the cheapest or tuning out to be the most affordable. It’s about the manner in which the transaction is handled.

Most people understand that if you walk up to a person selling their home and you bring a rather condescending tone on how they do business, the chances are that the seller will actually look at your offer as pretty low.

This is because you have put the seller into a “compromised position.” You have forced the seller’s sense of pride to overrule their desire to sell the home to you. Once you have put the seller in this position, it is difficult to correct it. Very few buyers are able to correct the mistake of insulting the seller. Pride is a really big deal.

On the other hand, insulting the buyer is just a mortal sin. There’s no way you can make up for a hurting buyer. You may well have botched your chance of selling a house, and may just end your career if the word spreads about your professional misdemeanor.

A mental arm wrestle.

As such, most people understand the obvious concept, but people often don’t realize how many different ways they can put either a seller or buyer into this defensive position. For example, buyers take the approach of including a defect-list in their offer which highlights every undesirable feature in the property, doing so to support a low offer.

At the end of the day, this is the same thing as saying “your house is undesirable and here is why”. The seller is insulted and either discards the offer, or counters at a higher price than they might have if they were not insulted.

Low-Ball offers don’t work.

A crazy low-ball offer is another common way to insult the seller. For most real estate buyers who are serious about finding a home that truly meets their needs, low-balling is a mistake. Buyers spend a lot of time searching for the right home, even before they look for a realtor. Once they find a great home and start writing an offer, their priority now shifts from “finding the dream house” to “winning this negotiation and get the house below fair value”.

More often than not, you won’t find “below market value” and “perfect home” in the same transaction. This is simply because its whole concept defies logic: how many times have you shopped for a product and have been willing to pay a premium for a particular product because it has all the features you highly desire?

The point is that just attempting this tactic often kills the deal, and the buyer usually ends up at square-one when the day ends. You’ll just waste a lot of time, or probably throw away a chance at your dream home. Stay focused on your true goals and negotiate realistically.

With this is mind, you can finally sell your Houston house for cash like you’ve always wanted.

Real estate tug of war.

Negotiate with Information, not Opinion.

Subjective price negotiation is a common scenario in almost every real estate transaction. Though it comes as a normal case, the challenge is to put your foot down on the best price that is justified by market comparables, yet giving an offer that is presented in such a way that it does not insult the seller.

Use the local market data to prepare and then support your offer: this is by far the most effective tool in price negotiations. Showing a seller market data is way more persuasive than simply saying, “I just feel like you are over-priced”. You can make your negotiation argument stronger by not basing on feelings alone, but rather using the real data that you can get your hands on.

Coming to a financial agreement.

Another reason market data helps is because many real estate agents barely know how to perform a market analysis. Simply put, they don’t really know what the property is worth, nor have property properly appraised. If the buyer-agent produces data that supports their client’s offer, many times the seller’s agent is swayed by the data and recommend that their client accepts the offer.

Meanwhile, this also holds true for the seller. If you can show the facts and the mathematics behind the numbers you are presenting as the best deal for the house (be it cheaper, or simply the right price for the right home), you can easily persuade the buyer to tender to your realtor service.

Structure the offer in a way that it will be accepted.

A good buyer’s agent coaches their clients about the best ways to position themselves and their offer to increase the likelihood of the seller’s acceptance. The saying “first impressions last” fits perfectly in this case.

This is also true for a strong buyer’s market; because if you want to pay the lowest price for a piece of property, you then have to be sure that all the other components to your offer, other than price, are as attractive as possible.

This includes a conditional loan-approval from a reputable lender, timeframe for close of escrow, use of qualified inspectors, amount and type of earnest deposit, contingencies and how they are structured, comparative analysis of the property, and the professionalism and attention to detail in the offer.

A financial compromise.

Remember that while price is very important to the seller, there are other aspects to consider in a deal. For instance, the seller only wants to go through the escrow process one single time to not waste any, so if all the components of your offer must say “I can close”, your lower-price offer may be preferable to a higher offer that says “I am not so sure this is the right house and I may be a pain and NOT close escrow”.

All things considered, real estate is all about proper communication. To master real estate, you should also master the art of negotiation to have the most success.