Central Ohio Real Estate Blog

Home Design Issues

2012-01-24T14:34:00.000-08:00

Dealing With Design Dilemmas Affordably

Practically every listing has flaws in its appearance. Here are several inexpensive solutions for almost any design problem.

With so much inventory on the market and buyers remaining picky, sellers need more aces up their sleeves. You’ve already helped them price their house right, perfected its curb appeal, and decluttered and staged it, but it’s still not attracting nibbles. Time to go to plan B: Camouflaging architectural and decorating dilemmas affordably.

For example, if a tiny powder room has dated fixtures, worn linoleum flooring, and no charm, suggest they redo it, since the cost to transform the tiny space will prove a good return on their investment, possibly under $3,000, for a white toilet and pedestal sink, hardwood flooring restained under the tile, a quality paint job, new towel and toilet bars, and new light fixtures.

Here are other ways to make a home look its best, attract kudos, and get bids:

1. Raise curb appeal: Though pristine curb appeal should be at the top of your to-do list, sometimes mowing a lawn, pruning shrubs, and removing dead branches isn’t enough, says landscape architect Eric Ringhofer of Green Guys Landscape in St. Louis. Tell sellers to go to the next level by weeding; edging flower beds; mulching; planting colorful flora (but not too much); and illuminating walks, trees, and the front door with low-voltage lamps. Simplicity should be the mantra, Ringhofer says. He also suggests some white flowers since they’re more visible in the dark than others.

2. Improve the “wow!” factor of the entry: Entry foyer blahs can be as off-putting as no foyer at all. This space should be as impressive to buyers as the front of the house does. “It’s the curb appeal beyond the curb appeal,” says Douglas Heddings, president of The Heddings Property Group in New York. “You want to continue the positive impressions made when people first see a property,” adds Jeff Sulkin of Calida Design Studio in Los Angeles. Even if there’s nothing architecturally interesting, add a focal point with inexpensive photos in matching black or pale wood frames, installed in a row at eye level or stacked, says designer Kimba Hills of Rumba Style in Santa Monica, Calif. Or, if the area is large enough, hang just one powerful 20-by-30-inch enlarged photo, says Montclair, N.J.–based photographer George Diebold. He also advises renting art from an artist or gallery if a purchase isn’t doable.

3. Downgrade from pricey brands: If dated kitchen appliances are the rub, suggest buyers replace one or two, and go with quality but not designer name brands to save, says designer Cheryl Kees Clendenon of In Detail Interiors in Pensacola, Fla. “They can still buy good equipment with stainless steel fronts, but without the same expensive pedigree. And they can cut the number of appliances — perhaps one speed oven that doubles as a microwave rather than two separate ones,” she says.

4. When in doubt, paint: An easy, affordable way to change a room quickly and economically is by painting it. A different color can make a space look larger, warmer, brighter, taller, or simply more distinctive. Paint also camouflages defects, such as a tired brick fireplace. And though many home owners think exteriors and interiors should be white, off-white, or beige, the new grays, blue-grays, and pale celadons or sages can make facades and walls more memorable in a crowded field, says color expert Amy Wax, author of Can’t Fail Color Schemes, Kitchens & Baths. And when possible, buy low- or no-VOC paint for healthfulness and the environment.

5. Improve connections: Today’s more casual entertaining style has made people crave rooms that flow together. Taking down part of a wall or cutting out an opening between a kitchen and family room lets areas work better together and makes small spaces seem larger, says Josh Collins of Prespro.com, a preservation and repair company in Charlotte, N.C.

6. Add cool hardware: When doors, cabinets, and drawers are unattractive and can’t be replaced or painted, new hardware in interesting shapes and hip finishes can provide a focus. Chrome, brushed nickel, and oil-rubbed bronze are the new “it” choices, beating out brass and wrought iron, Clendenon says. Advise sellers that they don’t have to have the same hardware throughout their home and even in the same room, but should opt for similar scale or materials. Clendenon recommends checking out sites such as www.duverre.com, www.atlashomewares.com, and www.topknobs.com for more information.

7. Re-grout: Without remodeling a dated bathroom, sellers can give it a fresh look by sponging on a new color atop dirty grout lines. “It’s an easy project and can change a room’s look,” says Leo Damian, Sulkin’s partner.

8. Lower energy costs: Because of soaring energy bills that strain budgets, many buyers want to know from the get-go about the costs to heat and cool a potential purchase. Have sellers do their part by changing bulbs to more efficient LEDs; picking energy-efficient appliances, water heater, and furnace if those need replacing; buying water-saving toilets and faucets, too; and selecting window treatments that block cold air rather than just look pretty. If windows are old, drafty, and ugly and replacing all of them isn’t affordable, advise sellers to switch those on the colder north side, says designer David Shove-Brown of Studio 3877 in Washington, D.C. Many changes still qualify for government tax credits.

9. Replace flooring: Worn, dirty carpeting is a huge turnoff and a major dust receptor. Rather than replace it with more carpeting, have sellers go with what’s more in vogue — hardwood planks. Purchasing them doesn’t have to involve great expense if they shop at stores like IKEA, Hills suggests. If hardwood isn’t an option, consider inexpensive sea grass, a universal design mixer. “You can throw a rug on top for color and pattern,” Hills says.

10. Change light fixtures:Besides paint, light alters a space dramatically and can make it seem larger, warmer, or lighter, depending on wattage and color. Fixtures also can make a difference at an affordable price. Trade old-fashioned Hollywood-style strips in bathrooms for sconces that cost less than $150 at stores like Home Depot or sites like Lamps Plus, says designer Christopher Grubb of Arch-Interiors Design Group in Los Angeles.

11. Offer a smell: Buyers look with all their senses, not just their eyes, says real estate consultant Kathy Braddock of Rutenberg Realty. Even though it seems like a cliché, wonderful baking or candle aromas can do wonders to distract attention from a room’s flaws, she says.

12. Offer a plan: When nothing short of remodeling a room works, sellers can hire a design pro to draw up a plan that eliminates a problem, says designer Judy Maier of Susan Fredman Design Group in Chicago. Architect Bruce Wright of SB Architects in San Francisco says drawings can be displayed along with the estimated price. Many designers and architects will perform this service for an hourly fee.

13. When all else fails, tell the bigger story: Though flaws can be a death knell for a sale, real estate agents can try to downplay them by touting the neighborhood’s pluses in marketing materials — for instance, if it’s a prized area and there isn’t much competition. Perhaps it’s known for award-winning schools, some significant cultural scene, or a major annual event, says Richard M. Gollis, principal with The Concord Group, a real estate consultancy. The best part about this approach? The main costs are your time and creativity!

January 2012 | By Barbara Ballinger

The Rental Market

2012-01-24T14:33:00.000-08:00

3 Ways to Take Advantage of a Rising Rental Market

Rentals are booming right now, thanks to falling home prices and economic uncertainty. Real estate pros who don’t take advantage of this situation will miss out on money-generating opportunities.

Amid widespread falling values, a large shadow inventory, and general economic uncertainty, perhaps the biggest positive development in the real estate industry in the past year has been the booming rental market. Vacancies in rental properties are falling, and this sector is the driving force behind housing starts right now. The swelling demand is also driving up rental costs, a trend expected to continue throughout this year.

While sales volume and housing values may improve nationally in 2012, it’s safe to predict that renting will continue to be a popular option for many people who remain wary of a home purchase — or who have left an upside-down mortgage.

For reasons ranging from personal income to quality of life in their communities, real estate professionals will almost always prefer the business of home sales over rentals. But that doesn’t mean there isn’t a silver lining of opportunity in the rising rental market.

Here are three ways to ride the rental wave:

1. Marketing

As the cost of renting has gone up, the affordability of housing — due to falling mortgage rates and home values — has gotten more favorable. What’s more, the Federal Reserve has publicly committed to a strategy of keeping lending rates low to facilitate economic recovery. Consequently, home ownership is considerably less expensive than renting in many markets, and probably will be for the foreseeable future.

If you’re operating in one of these markets, you can use the “buy vs. rent” argument in your promotions. For example, you could have brochures or print ads that say something like: “Still renting? You could be saving money every month and building long-term wealth! Contact me to find out how.”

2. Extra Income

Finding and negotiating leases for consumers can provide another income stream for real estate professionals whose primary focus is on homes. Many practitioners recoiled from these transactions in the past because the returns were not that great for the effort involved, especially compared to the standard commission on the sale of a house.

But new Web sites and online applications make it easier than ever to connect consumers with the rental properties they’re looking for. You can also establish relationships with local landlords and property management companies to get the inside track on what’s available for rent.

Plus, if you’re working with owners who can’t sell their house, you can suggest leasing it as an option. Given the state of the market, they might take you up on it. Additionally, multifamily property management and investment may be options to explore, depending on the amount of time, capital, and experience you have.

3. Consumer Relationships

The millennials, the oldest of whom are just now entering their 30s, still have fresh memories of the housing crash and financial crisis. Many of them are struggling to find any kind of work at all, let alone decent jobs. As such, most of them aren’t ready to be home owners yet. (To be fair, because of their age range, this would be the case even if the economy was performing well.)

The good news is that despite these current conditions, the millennials’ view of housing hasn’t really soured that much. Most of them still want to own a home someday. But if they don’t have the financial wherewithal or will to do so now, that means they’ll have to rent for at least a few more years.

That’s where you come in: By employing your customer service skills and expertise to help them find a rental property they like, you’ll be positioning yourself as their go-to agent when the time comes for them to buy a home.

Likewise, if former clients fall on hard times and need to find a new place to stay for a short while, you can assist them in their search for a rental. If they get back on their feet and want to purchase a house, you’ll be there for them again.

Even if you don’t make much from rental transactions, you’ll create opportunities for repeat — and hopefully more lucrative — business.

Conclusion

The rental market will likely benefit over the next couple of years from upheaval and insecurity in the broader economy, but the current boom will not last forever. Home ownership will enjoy a renaissance as soon as the economy stabilizes. Instead of just waiting for that to play out, you can be proactive and adapt to current conditions. If done right, taking advantage of the rental market will allow you to earn more now, and put you in a good position with clients when that turnaround comes.

January 2012 | By Brian Summerfield

2011-12-23T07:42:00.000-08:00

Home sales remain elevated in central Ohio

November marks the fifth consecutive month of increased home sales in central Ohio this year after the first half of the year struggled to keep up with increased sales from 2010 due to the home buyer tax credits. According to the Columbus Board of REALTORS®, 1,406 homes sold in November which is seven percent more than the previous year.

Additionally, the number of residential homes scheduled to close was up over 37 percent, from 1,341 last year to 1,843 last month (November 2011).

“We’re finding that sellers recognize the challenges of today’s market and are realistically pricing their homes to sell,” says Rick Benjamin, 2011 President of the Columbus Board of REALTORS®. “Buyers are responding well to the pricing and, of course, the record low interest rates. It’s still a great time to buy a home.”

Homes in central Ohio this year have sold for an average of $157,032, down 2.5 percent from the average sale price in 2010, but up over five percent from the average sale price in the first quarter of 2011. The average price of a home sold in November was $153,673, up 3.1 percent from the previous month ($149,082).

The number of homes listed for sale last month (1,949) is 20 percent less than listings added to the market in November 2010 (2,439). The total inventory of homes available for sale in central Ohio was 12,675 at the end of November, which is down 27.5 percent from one year ago.

As a result, the month’s supply, a measure of inventory that estimates how many months it would take to sell the entire home inventory, fell 28.5 percent to 7.4, down from 10.3 last year. “

A healthy months supply for our market would be around 6.5. So the decrease in inventory is a positive sign of market recovery. Plus, based on the concept of supply and demand, when we have too many homes on the market, homes are more likely to sell for less.

Tax Tips

2011-12-10T09:03:00.000-08:00

During times of economic turmoil, planning for your financial future can be a challenge. With that in mind here are some suggestions that offer you peace of mind and also simplify your life.

At least once a year, write down your investment goals and what strategies you will use to achieve them. Writing it down will help keep you focused.
Instead of giving money to several different charities, pick one or two that are important to you, and give a larger amount of money to each one. This type of directed giving not only makes more sense, but also makes it easier to track your donations at tax time.

Inventory your household possessions. the best way to do this is to make a list and then document your possessions using a camera or video camcorder. Keep your inventory in a safe place such as a safe-deposit box. An inventory will help you in the event you need to submit a claim to your insurance company.
Use one insurance agent and one financial advisor for your transactions.
If you have doubts about entering into a transaction, don't do it. You will probably save yourself money, time, and aggravation.

--From Bill Jacob, Bottom Line CPA

Interest Rates

2011-12-07T06:43:00.000-08:00

On November 18, 2011, the President signed into law the Consolidated and Further Continuing Appropriations Act 2012. This law re-establishes the higher FHA loan limits in high-cost areas which expired October 1 of this year. Previously, the Economic Stimulus Act of 2008 set higher limits for conforming and FHA loans in high cost areas because of limited availability of jumbo mortgages in the wake of the financial crisis. Why is this important to present and prospective homeowners? In higher cost areas, while jumbo mortgages are now available again, they are not available with the low rates and low down payment requirements of FHA mortgages. For example, many jumbo programs require a 20% down payment and FHA only requires a 3.5% down payment. That is quite a difference for those whose mortgages are over the present conforming high-cost limit of $625,500. The extended FHA high-cost limits go up to $729,750. FHA is available for both purchasing a home and refinancing your present home. You must live in the property you purchase if you are using FHA. If you are thinking about purchasing a home or refinancing and you want to know if the new extended FHA loan limits could help you, please contact us.

Ultra-low interest rates mixed with stabilizing home prices continued to push housing affordability in the third quarter near its highest levels in more than two decades, according to the latest National Association of Home Builders Housing Opportunity Index. For the third quarter, 72.9 percent of all homes sold were affordable to families earning the national median income of $64,200, according to the index. This marks the 11th consecutive quarter that the affordability measure was above 70 percent; prior to this it rarely was above 60 percent. "With interest rates at historically low levels and markets across the country beginning to improve, home ownership is within reach of more households than it has been for nearly two decades," Bob Nielsen, chairman of the National Association of Home Builders, said in a statement. Source: National Association of Home Builders

There are several tax credits and deductions set to expire at the end of the year, and given the federal deficit problem, there's a good chance they won't be extended. If you want to take advantage of them, you need to act before Jan. 1, 2012. Here are a few that affect homeowners...

Mortgage insurance premium deduction. If you itemize deductions, you may deduct the premiums you pay for mortgage insurance, just like you do mortgage interest. However, this deduction is phased out if your income exceeds certain levels. To qualify for the full deduction, a couple or a single taxpayer must have an adjusted gross income of $100,000 or less. The deduction is phased out completely if AGI exceeds $109,000. This deduction, which was first enacted for 2007, is scheduled to expire at the end of 2011. Thus, your payments are deductible only if you pay them during 2011; a payment after 2011 is not deductible.
Home energy credit. First, any homeowner may qualify for an energy credit of up to $500. You can qualify for the credit if you purchase during 2011 solar panels to generate electricity or for water heating, or install wind energy equipment, a geothermal heat pump, or certain types of fuel cells to generate electricity. The credit is up to 30 percent of the amount you spend, up to the $500 limit. This credit is not available for purchases in 2012.Source: Inman News

Central Ohio Homes Are Up!

2011-11-22T10:36:00.000-08:00

Central Ohio home sales were up again in central Ohio

Home sales in central Ohio home have exceeded 2010 for the last four months according to the

Columbus Board of REALTORS®. The 1,543 homes sold in October marks an 8.6 percent increase over

the 1,421 homes sold in October of 2010. Home sales in September were up 16.6 percent compared to

the year before.

Year-to-date, home sales (January through October 2011) are only 2.1 percent behind 2010 and closing

the gap.

Homes put in contract last month (1,379) were up 46 percent from a year ago making October the sixth

straight month of increased contracts.

The number of homes put into contract have been up for the last several months. However, contract failures – cancellations

caused largely by declined mortgage applications or failures in loan underwriting from appraised values

coming in below the negotiated price continue to be a problem for central Ohio buyers.

Total housing inventory at the end of October fell 23.3 percent to 13,827 existing homes available for

sale, which represents an 8.1-month supply at the current sales pace, up from an 8.7-month supply in

September.

The average sale price for single family homes and condominiums year to date is $157,327, down 2.4

percent from homes sold January through October 2010.

Affordability conditions this year have been the most favorable on record since 1970.

As mortgage interest rates continue to remain low, more first time home buyers, investors and move up

buyers are being drawn into the housing market.

43 Reasons to Keep WD-40 Handy

2010-04-27T05:11:00.000-07:00

Ken East (one of the original founders) says there is nothing in WD-40 that would hurt you. When you read the ' shower door' part, try it. It's the first thing that has ever cleaned that spotty shower door. If yours is plastic, it works just as well as glass. It's a miracle! Then try it on your stove top ... Viola! It's now shinier than it's ever been. You'll be amazed.

Here are some other uses:

1. Protects silver from tarnishing.

2. Removes road tar and grime from cars.

3. Cleans and lubricates guitar strings.

4. Gives floors that 'just-waxed' sheen without making them slippery.

5. Keeps flies off cows.

6. Restores and cleans chalkboards.

7. Removes lipstick stains.

8. Loosens stubborn zippers.

9. Untangles jewelry chains.

10. Removes stains from stainless steel sinks.

11. Removes dirt and grime from the barbecue grill.

12. Keeps ceramic/terra cotta garden pots from oxidizing.

13. Removes tomato stains from clothing.

14. Keeps glass shower doors free of water spots.

15. Camouflages scratches in ceramic and marble floors.

16. Keeps scissors working smoothly.

17. Lubricates noisy door hinges on vehicles and doors in homes.

18. It removes black scuff marks from the kitchen floor! Use WD-40 for those nasty tar and scuff marks on flooring. It doesn't seem to harm the finish and you won't have to scrub nearly as hard to get them off. Just remember to open some windows if you have a lot of marks.

19. Bug guts will eat away the finish on your car if not removed quickly! Use WD-40!

20. Gives a children's playground gym slide a shine for a super fast slide.

21. Lubricates gear shift and mower deck lever for ease of handling on riding mowers.

22. Rids kids rocking chairs and swings of squeaky noises.

23. Lubricates tracks in sticking home windows and makes them easier to open.

24. Spraying an umbrella stem makes it easier to open and close.

25. Restores and cleans padded leather dashboards in vehicles, as well as vinyl bumpers.

26. Restores and cleans roof racks on vehicles.

27. Lubricates and stops squeaks in electric fans.

28. Lubricates wheel sprockets on tricycles, wagons, and bicycles for easy handling.

29. Lubricates fan belts on washers and dryers and keeps them running smoothly.

30. Keeps rust from forming on saws and saw blades, and other tools.

31. Removes splattered grease on stove.

32. Keeps bathroom mirror from fogging.

33. Lubricates prosthetic limbs.

34. Keeps pigeons off the balcony (they hate the smell).

35. Removes all traces of duct tape.

36. Folks even spray it on their arms, hands, and knees to relieve arthritis pain.

37. Florida 's favorite use is: 'cleans and removes love bugs from grills and bumpers.'

38. The favorite use in the state of New York , WD-40 protects the Statue of Liberty from the elements.

39. WD-40 attracts fish. Spray a little on live bait or lures and you will be catching the big one in no time. Also, it's a lot cheaper than the chemical attractants that are made for just that purpose. Keep in mind though, using some chemical laced baits or lures for fishing are not allowed in some locations.

40. Use it for fire ant bites. It takes the sting away immediately and stops the itch.

41. WD-40 is great for removing crayon from walls. Spray on the mark and wipe with a clean rag.

42. Also, if you've discovered that your teenage daughter has washed and dried a tube of lipstick with a load of laundry, saturate the lipstick spots with WD-40 and rewash. Presto! The lipstick is gone!

43. If you sprayed WD-40 on the distributor cap, it would displace the moisture and allow the car to start.

P. S. The basic ingredient is FISH OIL.

Mold

2010-04-06T06:37:00.000-07:00

Mold is a relatively common household occurrence that can potentially cause health problems as well as damage to structures and surfaces. Although most molds are harmless, some can cause serious respiratory problems, especially in sensitive individuals, so it's important to be aware of potential mold growth in your home. As with most things, a little knowledge goes a long way - read below for information that will help you identify a mold problem.

Mold Basics: Mold enters your home as tiny spores, which need moisture to begin growing, digesting and destroying. Mold can grow on almost any surface, including wood, ceiling tiles, wallpaper, paints, carpet, sheet rock, and insulation, given the right conditions.

Identifying the Problem: Mold most often appears as small black or white specks in places like your damp bathroom or basement walls. To the unaided eye, mold has a variety of appearances: fuzzy, velvety, leathery, powdery, and glassy. Mold colonies may appear to be black stains or patches of white, yellow, green, brown, black, gray, or even pink. Some mold may be hidden behind wall coverings or ceiling tiles, but is often visible to the naked eye.

Where to Look: Mold grows best when there is an abundance of moisture, so it is often found in areas with water damage or excessive humidity. Mold can also be found growing along walls where warm moist air condenses on cooler wall surfaces, such as behind dressers, headboards, and in closets where articles are stored against walls. Mold often grows in rooms with both high water usage and humidity, such as kitchens, bathrooms, laundry rooms, and basements.

Trust your nose: The compounds produced by molds have strong smells, which are volatile and quickly released into the air. Because these compounds often have strong or unpleasant odors, they can cause a "moldy" or musty smell frequently associated with mold growth. A musty odor suggests that mold is growing in the building and should be investigated.

Fast and Furious: If you suspect a mold problem, you should address the issue as quickly as possible, as mold can spread quickly. You can successfully clean up a small amount of mold yourself using a simple solution warm water and soap, but larger infestations should be removed by a professional mitigation expert.

OFHA

2010-01-26T17:34:00.000-08:00

The Ohio Housing Finance Agency (OHFA) has announced they are offering the Tax Credit Advantage 2nd Mortgage Program again to qualified buyers. This program will enable your qualified buyers to get down-payment assistance (up to 3% of the purchase price) when they utilize the FHA Ohio Bond loan program.

Here are the basics:

-Borrower must be a 1st time homebuyer
-Assistance Funds up to 3% of the Purchase Price (no cash allowed back to buyer)
-Assistance Funds can be used towards Down-payment, Closing Costs and Pre-paid Expenses
-Loan is a 15 Year Fixed, 2nd Mortgage at 1% over the first mortgage rate
-Borrower must qualify for financing with 2nd Mortgage payment included in ratios
-Must be in Contract by April 30, 2010 and Closed by June 30, 2010

This is a great opportunity for potential homeowners who want to minimize their down-payment investment.

FHA Changes

2010-01-26T17:13:00.000-08:00

Borrowers who get an F.H.A.-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of the loan, up from 1.75 percent.

Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.

Other changes will try to hold lenders who participate in the F.H.A. program more accountable by publicly reporting their performance rankings.

The new measures are aimed at shoring up the agency’s finances while also screening out unprepared borrowers.

For years, the F.H.A. operated largely out of the public view. But it has become a subject of controversy recently even as it has ballooned in size. Some of the agency’s critics want it to tamp down risk by insuring fewer loans; others think it should help the market by insuring even more.

As of December, the F.H.A. was insuring 5.8 million single-family residences that had a total loan balance of $750 billion. More than half a million of the loans were seriously delinquent and heading toward foreclosure.

Many of these troubled loans were made in 2007 and 2008 as the market was plunging. Last fall, the agency said its cash reserves had tumbled to 0.5 percent of its loans outstanding, far below the 2 percent mandated by Congress.

Left largely untouched by the changes is the most controversial aspect of the agency’s program: a provision allowing buyers to make a down payment as low as 3.5 percent. Private lenders these days require at least 15 percent.

Borrowers who want to put the minimum down will now be required to have credit scores of at least 580, a relatively poor figure. Previously, there was no minimum score. But this rule might have little effect. The agency says that in practice, new borrowers already have much higher scores.

F.H.A. critics argue that the agency is allowing people to become homeowners while requiring relatively little of them, which they see as a replay of the poor lending standards that created the housing boom and subsequent decline.

Agency officials have responded by saying that they have adequate safeguards in place to make sure that borrowers are creditworthy, and that these loans are saving the housing market from collapse.

Lou Barnes, a loan officer with Premier Mortgage Group in Colorado who is among those who think the government is not doing enough to support the housing market, said the changes were not unduly restrictive. He noted that the insurance premium was merely returning to its level of a decade ago.

“The F.H.A. has done its best to protect the taxpayer, and the least harm to the credit supply,” Mr. Barnes said.

An industry consultant, Howard Glaser, said that with “the F.H.A. hovering around 40 percent of new loan originations, even small rule changes echo.”

Mr. Glaser, a former official with the Department of Housing and Urban Development, which includes the F.H.A., said that “obtaining credit will be a little more expensive or it may be a little more difficult to qualify” but that the changes were “not enough to have a systemic impact on slowing home buying.”

Home Maintenance

2009-11-18T07:38:00.000-08:00

Seal Up Cracks and Gaps and Save on Your Energy Bill

If you were to measure the total space of the cracks, gaps and holes around the perimeter of an average home, you would find a hole that is roughly three feet square. Imagine how much heat can escape, or moisture can enter, through a space that large. To prevent these problems, inspect the perimeter of your home and apply caulking or weather-stripping wherever necessary. Both caulking and weather stripping can reduce the flow of cold air in, warm air out, and ultimately cut energy costs.

How to Caulk: Clean surface by removing dirt, loose paint and old caulk, and thoroughly dry the surface. Determine which caulk to use based on the size of the crack or gap and the surrounding material. Cut the tip off of a tube of caulking at a 45° angle and load it into a caulking gun. The nozzle is tapered, so the amount you cut off determines whether you have a thin, medium or heavy bead of caulk. Cut near the narrow end for a narrow bead or further up for a wider bead. Use a long nail to break the inner seal and to plug the nozzle when finished. Apply caulk by laying a uniform bead of caulk that overlaps both sides, and completely fills, the crack. Remove excess caulking and allow it to dry.

Weather-stripping: Apply weather-stripping at joints where two surfaces meet, such as around windows and doors, to provide an airtight seal. There are a few different types of weather stripping and each has its benefits and drawbacks. Once you choose the appropriate weather stripping, follow the instructions for proper application.

Tape - lasts only one year and should only be used on windows or doors that will not be opened. Tends to dry and loosen within one season

Felt - lasts one or two years and should be used on the top and/or sides of doors or window frames for sealing gaps of uniformly narrow width

Foam - This is known as “backer rod” and looks like a foam tube in a roll. It comes in different diameters and lasts one or two years. Use on the bottom of window sashes or around the frames of warped or loose-fitting doors and windows

New Tax Credit

2009-11-14T14:10:00.000-08:00

TAX CREDIT OVERVIEW

Who Gets What?

First-Time Homebuyers (FTHBs): First-time homebuyers (that is, people who have not owned a home within the last three years) may be eligible for the tax credit. The credit for FTHBs is 10% of the purchase price of the home, with a maximum available credit of $8,000

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Current Owners: The tax credit program now gives those who already own a residence some additional reasons to move to a new home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

What are the New Deadlines?

In order to qualify for the credit, all contracts need to be in effect no later than April 30, 2010 and close no later than June 30, 2010.

What are the Income Caps?

The amount of income someone can earn and qualify for the full amount of the credit has been increased.

Single tax filers who earn up to $125,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, single filers who earn $145,000 and above are ineligible

Joint filers who earn up to $225,000 are eligible for the total credit amount. Those who earn more than this cap can receive a partial credit. However, joint filers who earn $245,000 and above are ineligible.

What is the Maximum Purchase Price?

Qualifying buyers may purchase a property with a maximum sale price of $800,000.

What is a Tax Credit?

A tax credit is a direct reduction in tax liability owed by an individual to the Internal Revenue Service (IRS). In the event no taxes are owed, the IRS will issue a check for the amount of the tax credit an individual is owed. Unlike the tax credit that existed in 2008, this credit does not require repayment unless the home, at any time in the first 36 months of ownership, is no longer an individual’s primary residence.

How Much are First-Time Homebuyers (FTHB) Eligible to Receive?

An eligible homebuyer may request from the IRS a tax credit of up to $8,000 or 10% of the purchase price for a home. If the amount of the home purchased is $75,000, the maximum amount the credit can be is $7,500. If the amount of the home purchased is $100,000, the amount of the credit may not exceed $8,000.

Who is Eligible fort FTHB Tax Credit?

Anyone who has not owned a primary residence in the previous 36 months, prior to closing and the transfer of title, is eligible.

This applies both to single taxpayers and married couples. In the case where there is a married couple, if either spouse has owned a primary residence in the last 36 months, neither would qualify. In the case where an individual has owned property that has not been a primary residence, such as a second home or investment property, that individual would be eligible.

As mentioned above, the tax credit has been expanded so that existing homeowners who have owned and occupied a primary residence for a period of five consecutive years during the last eight years are now eligible for a tax credit of up to $6,500.

How Much are Current Home Owners Eligible to Receive?

The tax credit program includes a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years.

Can Homebuyers Claim the Tax Credit in Advance of Purchasing a Property?

No. The IRS has recently begun prosecuting people who have claimed credits where a purchase had not taken place.

Can a Taxpayer Claim a Credit if the Property is Purchased from a Seller with Seller Financing and the Seller Retains Title to the Property?

Yes. In situations where the buyer purchases the property, even though the seller retains legal title, the taxpayer may file for the credit. Some examples of this would include a land contract or a contract for deed.

According to the IRS, factors that would demonstrate the ownership of the property would include:

1. Right of possession,
2. Right to obtain legal title upon full payment of the purchase price,
3. Right to construct improvements,
4. Obligation to pay property taxes,
5. Risk of loss,
6. Responsibility to insure the property, and
7. Duty to maintain the property.

Are There Other Restrictions to Taking the FTHB Credit?

Yes. According to the IRS, if any of the following describe a homebuyer’s situation, a credit would not be due:

1. They buy the home from a close relative. This includes a spouse, parent, grandparent, child or grandchild. (Please see the question below for details regarding purchases from “step-relatives.”)
2. They do not use the home as your principal residence.
3. They sell their home before the end of the year.
4. They are a nonresident alien.
5. They are, or were, eligible to claim the District of Columbia first-time homebuyer credit for any taxable year. (This does not apply for a home purchased in 2009.)
6. Their home financing comes from tax-exempt mortgage revenue bonds. (This does not apply for a home purchased in 2009.)
7. They owned a principal residence at any time during the three years prior to the date of purchase of your new home. For example, if you bought a home on July 1, 2008, you cannot take the credit for that home if you owned, or had an ownership interest in, another principal residence at any time from July 2, 2005, through July 1, 2008.

Can Homebuyers Purchase a Home from a Step-Relative and Still be Eligible for the Credit?

Yes. As long as the person they buy the home from is not a direct blood relative, the purchase would be allowed.

If a Parent (Who Will Not Live In the Property) Cosigns for a Mortgage, Will Their Child Still be Eligible for the Credit?

Yes, provided that the child meets the other requirements for the tax credit.

As Always – This is a Tax Ruling –

Please consult a Tax Accountant for your scenario

Preparing For Winter

2009-09-24T08:08:00.001-07:00

It's Fall: Time to Prepare Your Home for Winter

Fall maintenance is important because it helps make homes more energy efficient during the winter months, and will safeguard homes against potential seasonal 'disasters' such as leaking roofs or home fires caused by neglected chimneys. Here are ten tips to a safer, warmer winter.

TIP #1 -- Check the heating system. Check the filter, pilot light and burners in a system fueled by gas or oil. Fireplaces, boilers, water heaters, space heaters and wood burning stoves should also be serviced every year. Have the specialist inspecting your unit show you how to change the filter and then you should change it at least once every 2 months. Clean ducts in the heating system. Clean and vacuum dust from vents, baseboard heaters and cold air returns. Dust build-up in ducts is a major cause of indoor pollutants. Ducts should be professionally cleaned about every three years.

TIP #2 -- Have the chimney inspected by a qualified chimney professional. Chimneys should be checked and cleaned, if necessary, on an annual basis. If you are using a wood stove this season, be sure that the stovepipe was installed correctly according to the manufacturer's recommendations and local codes. If there is any doubt, a building inspector or fire official can determine whether the system is properly installed. If you have a chimney that will not be used, consider having it sealed shut.

TIP #3 -- Test fire alarms, smoke detectors and carbon monoxide detectors, and vacuum out the dust. Batteries should be checked every six months to ensure that they're working.

TIP #4 -- Remove excess leaves and damaged branches from trees surrounding the house. Dead branches have the potential to break and fall, ruining roofs, decks, or vehicles and the possibly causing injuries to people.

TIP #5 -- Maintain gutters. Remove all debris that can slow or impede the ability of water to drain effectively from the roof. Trapped water can be destructive not only to the gutters themselves but to the adjoining roof as well. Make sure gutter water drains away from your home.

TIP #6 -- Inspect the roof. Look for damaged or loose shingles, gaps in the flashing at joints with siding, vents and flues, as well as damaged mortar around the chimney.

TIP #7 -- Inspect exterior walls, doors and windows. Check walls and window sills for damage such as cracks, gaps, loose or crumbling mortar, along with splitting and decaying wood. Caulk exterior joints around windows and doors, which helps keep the home weather tight and lower heating bills. Check windows and doors to make sure locks work properly and that they are in good condition. Clean tracks and lubricate hinges. Repair or replace any cracked windows.

TIP #8 -- Maintain steps and handrails. Repair broken steps and secure loose banisters and handrails. Broken steps can cause a dangerous fall. Similarly, a person slipping will grab a handrail for support.

TIP #9 -- Inspect the attic and basement or crawlspace. Insulate voids in the attic - the entire attic floor above a living space should be insulated with at least six inches of insulation, except around electrical fixtures such as recessed lights that aren't rated for contact with insulation. Damp basements and crawl spaces can become mold and mildew problems. Watch for leaks from your water heater, plumbing system and seeping rain water from the roof. Locate and maintain a clear access to your main water shut off valve. If you have a sump pump, test, clean and lubricate it.

TIP #10 -- Shut down sprinkler systems and outside faucets. Homeowners can shut down outside faucets, however weatherizing the underground sprinkler system is best performed by industry professionals who will flush the system before the cold sets in, preventing cracked pipes.

Childhood Cancer Month

2009-09-03T12:11:00.000-07:00

September is Childhood Cancer Awareness Month.

People Against Childhood Cancer (PAC-2) is asking to bring more awarenerss.

President Obama gets 10,000 to 15,000 emails and letters every day.
But, he only gets 1,000 faxes a day…..so….

One day…one Time….let’s double that number, triple that number….we can stand out, be heard, if we all do it together!

Fax the President and ask for a September ceremony in the Rose Garden honoring children during National Childhood Cancer Awareness Month. All on ONE day. All together.

When – Today, September 3, 2009 – all day

What - A short note faxed to 202-456-2461. (send a free fax at http://www.faxzero.com/ or http://www.myfax.com/free)

SAMPLE TEMPLATE: Quickly customize the first line of the following request. Add your name and fax it off.

RE: Nation Childhood Cancer Awareness Rose Garden Ceremony Request

Dear President Obama:

As the {FATHER, MOTHER, GRANDPARENT, AUNT, UNCLE, BROTHER, SISTER, COUSIN, FRIEND, DOCTOR, NURSE, DENTIST, PASTOR, TEACHER, PRINCIPAL} of {A/SEVERAL} childhood cancer victim(S) I am writing to request that you hold a ceremony in the Rose Garden in honor of September National Childhood Cancer Awareness Month.

Every year 12,500 children are diagnosed with cancer, and it is the leading cause of death by disease for children before age 20. 1 in 300 children are diagnosed with cancer before age 20 yet funding and awareness is woefully inadequate. This is not a “special interest group”. We are a large, diverse grassroots community passionate about providing all our children a stronger voice and assuring them equal access to research funding for Childhood Cancer. Our question on Increased Funding for Childhood Cancer was included in the Citizen’s Briefing Book presented to you by your Transition Team, question #5 in Health Care.

The awareness resulting from a ceremony would be a wonderful way to show your commitment to our future, our children. It would be an appropriate time to demonstrate that commitment by announcing full funding of the Caroline Pryce Walker Conquer Childhood Cancer Act.

Thank you.

Warmest Regards,

YOUR NAME HERE

Go for it. Now. And never forget...

Cancer is the leading cause of death from disease in children between the ages of 1-19.
1 in 330 will be diagnosed with cancer by age 20.
More children die from cancer than from all other childhood diseases combined.
The incidence of childhood cancer has increased every year for the last 25 years.
Every school day, about 46 young people (2 classrooms full) are diagnosed with cancer in the US and that 7 will die each day.
The National Cancer Institutes federal budget is about $5 billion. Less than 3% of that goes toward all pediatric cancers combined. The rest goes toward adult cancers. Breast cancer alone receives 12%. Prostate cancer receives 7%.
At time of diagnosis in children, the cancer has already spread in 80% of the cases. That is compared to 20% in adults.
Young adults aged 15-22 have the lowest cancer survival rate of any age group.
Teenagers are extremely under represented in clinical trials for cancer, especially the 15-19 age group. They tend to excluded from both childhood and adult cancer studies, in both cases due to their age.
In the past 25 years there has only been one new drug treatment developed specifically for pediatric cancers. Since children can handle much more chemo than adults, most treatments are little more than mega doses of adult cancer chemotherapy treatments. The result of these high doses of chemo on children is a higher rate of secondary cancers.
For reasons not fully known, teenagers experience the highest rate of secondary cancers as a result of the high dose chemotherapy treatments.
A 5 year study was recently concluded at Children's Hospital of Pittsburgh of UPMC, that concluded that teenage cancer survivorship is lower due to a lack of access to clinical trials.

Dublin Sales Activity Improves

2009-09-01T17:24:00.000-07:00

Dublin Homes For Sale

Dublin Recently Sold Homes

Moving In Tips

2009-08-26T20:33:00.000-07:00

The First Week-

Install new locks.

Make extra sets of keys.

Buy a fire extinguisher for the kitchen and garage.

Install or check the batteries in the smoke detectors.

Keep Your House In Shape

Make repairs and do preventative maintenance as needed early on.

Keep an eye open for termite droppings and wet wood condition.

Keep rain gutters and downspouts working properly to drain water away from the house.

Home Safety Check List

Install good sturdy handrails.

Service all heating equipment.

Install carbon monoxide detectors.

Use anti-skid material under area rugs.

Install smoke detectors in key locations.

Install an automatic night light outside bedrooms.

Keep fire extinguishers handy in kitchen and garage.

Keep medicines, poisons and firearms in child secured cabinets.

Properly store paints, solvents and gasoline in a well-ventilated area.

Provide rope or chain ladders on upper stories if there is no fire escape.

Install ground fault circuit interrupters (GFCI) in bathrooms and by kitchen sink.

Disaster Preparedness:

Food for a week.

Bleach to purify water.

Camp stove and extra fuel.

Fire extinguisher and first aid kit handy.

Know where to turn off gas and water mains.

Water: 1 gallon a day per person for at least three days.

Keep flashlights, spare batteries, matches and candles in a special drawer.

Start A House File

Keep all important house related papers, title insurance, loan information, property insurance, etc. in a central "house file" system.

Important: save all receipts for any home improvements for later "possible" tax write-offs.

Thinking Of Adding On?- Always get permits.- Don't over improve for the neighborhood.- Use professionals to maximize your investment.- Addition should blend well with the existing architecture.Well-planned and executed remodeling jobs are a good investment and some specific home improvements even can increase the value above the initial cost. Any owner contemplating an addition and/or change to his or her property should first check with the appropriate county or municipal building department to avoid any building code violations, which will generally render a seller's title unmarketable. In addition a seller's failure to disclose such violations (they have knowledge of) may constitute a material misrepresentation, entitling the buyer to rescind the transaction and obtain the return of his or her money.What Makes More Sense - Adding on or Buying a Bigger?Homeowners should consider several questions before making a choice between adding on to an existing home or moving up in the market to a bigger house.- How much money is available, either from cash reserves or through a home improvement loan, to remodel the current house?- How much additional space is required?- Would the foundation support a second floor?- What do local zoning and building ordinances permit?- How much equity already exists in the property?- Are there affordable properties for sale that would satisfy housing needs?Consider limitations of your neighborhood. It makes more sense to add on to the smallest house than to further improve the largest one in the area.Ultimately, the decision should be based on individual needs, the extent of work involved and what will add the most value.Choosing a Reliable Contractor?Never hire a contractor without first taking the following 9 steps:1. Call the State License Board to verify the license number of the contractor. And ask the board if there are any outstanding complaints against that license holder.2. Contact your local Better Business Bureau to see if there are any complaints on file.3. When interviewing, ask prospects about their workman's compensation insurance.4. Get the policy number and phone number of the insurance carrier. Call to be sure the contractor is covered. If he or she is not, any work-related injury on your property could become a liability to you.5. Check to see that the contractor has an umbrella general liability policy.6. Always ask for references.7. Always take the time to call and verify them.8. Do not give in to pressure to make a decision. Believe it or not, there are more contractors than there is work to be done. If a contractor insists that you make a quick decision, move on to someone else.9. Never pay a deposit to a contractor. If you are asked to pay a deposit fee at the first meeting, simply end the meeting.Special Government Programs for Rehab?HUD's Rehabilitation Loan Program, Section 203 (K) is designed to facilitate major structural rehabilitation of houses with one to four units that are more than one year old.Condominiums are not eligible.The 203 (K) loan is usually done as a combination loan to purchase a fixer-upper property "as is" and rehabilitate it, or to refinance a temporary loan to buy the property and do the rehabilitation. It can also be done as a rehabilitation-only loan. Plans and specifications for the proposed work must be submitted for architectural review and cost estimation. Mortgage proceeds are advanced periodically during the rehabilitation period to finance the construction costs.At this time, only select lenders are participating.For a lender list, call HUD.Some Home Improvement Expenses are Tax Deductible.Mortgage interest payments on acquiring and improving a principal residence are fully deductible from income for tax purposes In addition, expenditures for permanent improvements can be added into your home's cost basis, or amount of money invested in a home, which reduces capital gains.Save all receipts of money spent for permanent improvements, repairs after a fire, flood or storm and special property tax assessments for neighborhood improvements.Capital gains are determined by the difference in price from the time a home is purchased and the time it is sold, minus the cost of any permanent improvements.Thinking Of Refinancing?- Don't list your house for sale if you are thinking of refinancing.- Lenders usually require your house not to be listed in the recent past.- Appraisers are required to make such disclosures if known.- Keep Your Insurance Up To Date- Keep records of any improvements as you have them done.- Keep in a binder, receipts and owner's manuals of any equipment you buy.- Take photos or videos of all your rooms and keep them in a safe place.- Property values can rise dramatically in just a few years which is why it is important to have replacement cost insurance. Should you have a theft or fire, these will be very valuable for claims.Know Your NeighborhoodAfter you are settled in, introduce yourself to your neighbors and invite them over.Most people want to know who their neighbors are, but most are shy about making thatfirst introduction.Break the ice first and introduce yourself.Get involved in the neighborhood watch program. In areas of high crime, community watch programs organized by homeowners can lower the crime rate and rid a neighborhood of graffiti. These improvements also can enhance property values.Knowing your neighbors is why people enjoy living where they live.

Moving Tips

2009-08-26T20:26:00.000-07:00

So you've decided to make a move.

Are you ready to box up everything you own - all the possessions that mean "home" to you and your family - and ship them to another part of the country? It's no wonder that moving is ranked among life's most stressful events.

With the proper planning and preparation, you can make your next move a smooth one.
Moving doesn't have to be such a hectic event. Doing things in an orderly manner will save time, money and lots of stress.

A good way to reduce stress is to develop a calendar that starts six weeks before your move. This calendar will serve as your "countdown" to moving day.

Six Weeks Before You Move
Take an objective look at what you own, and decide what must go and what can be left behind. Books you've read and will never read again. Records you haven't listened to since college. The pan with a broken handle or the children's long-neglected games. Extra weight costs more money.

Contact moving companies to get estimates. Pay attention to cost, but also ask them what they'll do to make your move as smooth as possible.

If you have a lot of things worth selling, you may want to organize a garage sale.

Get an estimate from your mover on the cost of letting the company professionally pack all or some of your belongings. The time and effort you save may be worth the cost. While the mover is liable for breakage to any items it packs, you're responsible for damage to improperly packed items that you have boxed yourself.

If you've decided to let your mover pack for you, begin separating what you plan to sell, give away, throw away and keep.

Start a central file for all of the details on your move. It's a good idea to buy a brightly colored organizer folder with pockets - you'll be less likely to misplace it. Make sure to collect receipts for moving-related expenses. Depending on your reason for moving, you may be entitled to a tax deduction.

Create a floor plan of your new home (you can request this from your Realtor) and begin thinking about where you'll want to place furniture. Advance planning eases the stress of making major decisions when your furniture arrives at your new home. Mark and label specific pieces of furniture on your diagram, and put it in your moving folder.

Five Weeks Before You Move
Select your mover, and meet to discuss dates and costs.

Decide now whether you want to pack yourself or hire your mover to do this task. Self-packing can save money.

If you've decided to pack yourself, you'll need to begin gathering boxes. Your mover can provide boxes most suited for moving, including special-purpose containers for items like clothing on hangers and lamp shades.

Four Weeks Before You Move
Notify the post office, magazines, credit card companies and friends and family of your change of address. The U.S. Postal Service offers a kit to make this process easier. On-Line at http://www.usps.com .

Contact utilities (gas, water, electricity, telephone, cable TV) to schedule disconnection of services on the day following your move. You'll want to have utilities on while you're still in the house. :-)

Call the utilities in your new town to arrange for service to start the day before your move so that you have service when you arrive at your new home.

If you are planning to move major appliances, talk with your mover to schedule disconnection and servicing a few days before you move. And don't forget to arrange for an expert, if necessary, to install fixtures upon their arrival at your new home. Complete any repair work on your old home, and arrange for any critical services needed at your new home.

If packing yourself, start packing seldom-used articles like fancy dishes and glasses, specialty cookware, non-essential clothing, curios, art, photos, and decorative items.

As you pack, remember to keep each box light enough to be handled by any of the members of your family - not just the strongest person. Heavier items go in smaller boxes, lighter items in larger boxes.

If you are planning a garage sale, pick a date at least a week before the move, and advertise it locally. Think about teaming up with neighbors who want to sell some of their old belongings, and plan a neighborhood "super sale."

Three Weeks Before You Move
Take inventory of your everyday household goods, such as radios, pots and pans and small appliances. Decide which items you will discard or put in storage.

Self-packers: start your serious packing. Label the contents of all boxes, and pack carefully.

As best you can, box essential items together, and write "open first/load last" on these boxes.

When you move into your new home, you'll be able to easily identify these boxes and get to important items like pots, dishes, silverware, alarm clocks, bedding, pillows, towels, cherished toys and essential items for babies or children.

Make sure you have your driver's license, auto registration and insurance records.

Contact your doctors, dentist and veterinarian to receive copies of medical records.

Pack phone books from your old town to make staying in touch with old friends easier.

Make personal travel arrangements (flights, hotel, rental cars) for your trip.

Plan your food purchases to have as little as possible in the freezer or refrigerator by the time you move. Use up all frozen items, and buy only what you'll eat in the next three weeks, because you can't ship them.

Arrange to clean your new home, or plan to clean it yourself, as close to move-in as possible.

Since the home will probably be unoccupied by this time, make sure the cleaning is thorough and covers all those nooks and crannies usually blocked by furniture or appliances.

Contact your children's schools, and arrange for records to be forwarded to your new school district. For New School Addresses go to: http://www.schoolmatch.com

Make new bank safety deposit box arrangements in your new hometown. Make arrangements to safely transfer items from your old safe deposit box to your new one.

Hold a garage sale now.

Two Weeks Before You Move
Check with your insurance company to transfer coverage to your new home.

Make arrangements for transporting your pets and any house plants, because movers can't take them in the van.

Meet with your bank to change account status or Switch to on-line Banking!!

Transfer all current prescriptions to a drug store in your new town.

Cancel any delivery services such as newspapers. Consider starting a subscription to the newspaper in your new town to introduce you to local news happenings.

Have your automobile serviced if you're traveling by car.

Be sure to empty secret hiding places to remove valuables and spare house keys.

One Week Before You Move

Mow your lawn for the last time.

Dispose of toxic or flammable items that can't be moved. Drain the gas and oil from gas-powered tools such as lawn mowers and snowblowers; movers will not take them if full.

Double-check to make sure arrangements have been made to disconnect and service your major appliances being moved.

Pack your "trip kit" of necessary items that should go in your car and not the moving van: your checkbook, cash or travelers checks, medications, essential toiletries, light bulbs, flashlight, toilet paper, pet food, spare glasses or contact lenses, baby or child care items, toys and car games for children and your notebook with moving information.

If you have young children, arrange for a baby-sitter to watch them on moving day. Since you'll have your hands full, the extra attention from a sitter will distract the child's attention from the turmoil of a move.

Also arrange for a baby-sitter to be available when you arrive at your new home with young children.

Pack your own suitcase of clothes for the move.

Put your "open first/load last" boxes in a separate place so the mover can identify them.

Pay all outstanding bills. Be sure to indicate your new address on payment receipts.

Remove any fixtures you are taking with you and replace (if specified in your home-selling contract).

One To Two Days Before You Move

The movers will arrive to start the packing process.

Empty and defrost your refrigerator and freezer; clean both with a disinfectant and let them air out. Put baking soda or charcoal inside to keep them fresh.

Arrange for payment to the moving company. This payment must be made when your belongings arrive at your new home before your belongings are unloaded. Find out your moving company's accepted methods of payment, terms, and its policy for inspecting your belongings when they arrive to determine if any breakage has occurred.

Empty your safety deposit box. Plan to take important papers, jewelry, cherished family photos, irreplaceable mementos and vital computer files with you.

Write directions to your new home for the van operator, provide the new phone number and include phone numbers where you can be reached in transit - either a car phone or friends, old neighbors, a place of business or relatives with whom you'll be in contact. You'll never be out of touch for long should an emergency arise.

Leave your forwarding address and phone number for your old home's new occupants.

If your old house will be sitting vacant, notify police and neighbors.

Moving Day

Remove linens from the beds and pack in an "open first" box.

When the movers arrive, review all details and paperwork. Accompany the van operator to take inventory. Verify delivery plans.

If there is time, give the home a final cleaning, or arrange in advance for someone to perform this service the day after moving out.

Move-In Day

If you arrive before the movers, take some time to tidy up your home (dusting shelves, etc.) so the movers can unpack items directly onto clean shelves. If you plan to line cupboards with shelving paper, this is a good time to do it.

Unpack your car.

Review your floor plan to refresh your memory about where you want furniture and appliances placed.

Check to make sure the utilities have been connected, and follow-up on any delays.

Confine your pets to an out-of-the-way room to help keep them from running away or getting unduly agitated by all the activity. You might even consider boarding them overnight at a local kennel until you're settled.

Plan to be present when the moving van arrives. Be prepared to pay the mover before unloading.

One person should check the inventory sheets as items are unloaded. A second person should direct the movers on where to place items.

Once all items are unloaded, unpack only what you need for the first day or two. Focus on creating a sense of home for your family. Give yourself at least two weeks to unpack and organize your belongings.

Building a Home

2009-08-26T20:17:00.000-07:00

Buying Land & Building a Home

Following is general information and may vary from area to area. Check your local government for specific information.Before you spend much time looking for land to buy, first do a little research to find out what costs and steps have to be take before the actual construction. You may decide it is worth more to buy an existing home and make personal modifications. Many first time home builders think you just buy a lot and get some building permits and start building. Not so, there are a number of steps and issues one has to consider before applying for building permits. When buying land, you need to check the zoning to see if a home can be built on it. If it is zoned for residential, one must consider if it can be hooked up to sewer and water or is capable of supporting a septic system and well.

Septic systems generally cost $5,000-$10,000.Wells can cost $15,000-$40,000, depending on the depth, location and the need for a secondary pressure tank. Building in an unincorporated area usually requires a secondary pressure tank for the required interior fire sprinklers. Then there is the cost of bringing in other utilities such as electricity, propane tanks and phone lines.

Certain areas in the county require a "Perq Test" to determine if the site is suitable for the required septic system. This involves digging a hole about 10 feet deep and waiting a few days to determine if the ground water rises to the point where a septic system would contaminate it.

This test can only be done during the rainy season which generally ends in April.Grading a lot can be a major cost of building a home. Many lots are priced seemingly low because the high cost of grading and site preparation in order to build.Obtaining a loan on land is not as easy as getting a loan for buying a house.Buying raw land, lenders typically require 50% down usually with a shorter term and a higher rate of interest.Once these steps are taken the next stop is the local planning department.

The following information was derived from materials provided by the cities of Morgan Hill and Gilroy and should be considered as only a guideline. Contact the City for the most up to date information.

Follows are some of the steps necessary to complete the process of building a home.Advanced Review GroupThis group, consisting of a Planner, an Engineer, a Plan Review Technician and the Fire Marshal, meets with the project owner and his/her staff at their request, prior to the submission of any application, to discuss the process for that particular project.

This optional meeting is designed to result in both the owner and the City having an understanding about the nature and scope of the project, the steps required in the process, an approximate time frame in which the project can be completed and an approximation of the fees which will be charged.

Land Use ApplicationsLand use applications are processes such as General Plan Amendments, Zoning Changes, inclusion in the Urban Service Area, Residential Development Ordinance applications, Tentative Map applications, Conditional Use permits, and Architectural and Site Reviews. One or more of these applications may be necessary on some developments.

Environmental Review
Certain projects, because of their size or potential impact, may require an environmental review. This determination is based on rules of the California Environmental Quality act.

Development Review GroupThe Development Review Group meets every week to discuss all applications received in the past week. This group consists of members of each Division within the City organization which has responsibility for any part of the development process.

The group reviews Architectural and Site Review applications. It will also review preliminary plans in order to help the applicant identify any problem areas prior to a full submission of an application. In many cases, this results in a significant time savings for both the applicant and the City, allowing us to reduce your costs as well as the fees we must charge to recover our costs.

Sewer AllocationsAdditional or new allocations for sewer capacity are granted by the Engineering Division in accordance with policies set by the City Council.

Utility ConnectionsConnections to water, sewer and storm drainage systems are handled by the Engineering Division. Engineering also reviews all infrastructure plans associated with new development and inspects the work.Parcel MapsParcel maps are required in order to split lots and for subdivisions.Building Permits and InspectionBuilding permits are generally required for any building or construction involving any plumbing, electrical, mechanical, or structural alterations.

The Uniform Building Code states that a permit is required for all new construction, demolition, remodeling, improving, removing, repairs, or moving of all buildings or structures.Regardless of the type of occupancy, a permit is required for additions, swimming pools, hot tubs, spas, decks over 30" above grade, carports, sheds over 120 sq. ft. of roof area, skylights, covered patios and walkways, retaining walls, bathroom and kitchen remodeling, termite repairs, reroofing, solar panels and most interior and exterior remodeling work. Permits are also required for plumbing, electrical, and heating and cooling work.When work is done without a permit, the permit fees will be doubled, the completed work may have to be dismantled or uncovered to provide access for inspection.

Who May Apply for a Permit?
Property owners or licensed contractors may apply for a building permit.The person signing for the permit must declare they have no employees, or they must show proof of a valid Workers' Compensation Insurance policy before a permit can be issued.

General Permit RequirementsFor new construction, additions and most remodeling, complete plans are required.All plans must include the name and address of the architect, engineer, or other person preparing the plan.Energy calculations are required and must be incorporated into the plans.

Generally 3 or 4 sets of plans are required to be submitted.Information Required on DrawingsA plot plan must be included in plans for any work which alters the use, exterior footprint, exterior of an existing structure, or for any new buildings.

Plot plans must show lot dimensions, front, rear and side setback distances to all property lines and existing buildings.

Indicate all easements and underground utility lines.Show locations and sizes of proposed and existing water, sewer, gas and electric meter.

Floor plans must show dimensions and the location of all walls, plumbing fixtures, doors, windows, appliances, kitchen counter, furnace and water heater.All electrical fixtures and locations must be indicated.

Framing plans must indicate the sizes of floor joists and girders, ceiling joists and roof rafters. If you are using main beams, trusses or any unconventional framing, calculations must be submitted.Four exterior elevations are required which show windows, doors, skylights and architectural finish features. Heights of buildings must be indicated to show compliance with zoning regulations.

Engineered Plans
If you are constructing a new building or addition on a hillside, engineered footings are required, with soils and geology reports to substantiate all design assumptions. Calculations shall be submitted in two copies with the designers wet signature and stamp. Structures in the residential hillside zone must have noncombustible roofing and be fire sprinklered.

How Much Will it Cost?
Building permit fees are based on a proportion of the total construction cost, including all labor and material involved in the proposed work.

A plan check fee is assessed at a percentage of the building permit fee.
Plumbing, electrical and mechanical permit fees are based on the actual work done, such as how many receptacles, sinks, etc.Where applicable, all site development fees, parks development fees, public safety fees and school impact fees, mitigation fees and water meter hook-up fees must be paid prior to permit issuance.

Common Seller Mistakes

2009-08-26T20:14:00.000-07:00

Common Mistakes Sellers Make

1. Basing the asking price on needs or emotion rather than market value. Many times sellers base their pricing on how much they paid for or invested in their home. This can be an expensive mistake. If your home is not priced competitively, buyers will reject it in favor of other larger homes for the same price. At the same time, the buyers who should be looking at your house will not see it because it is priced over their heads. The result is increased market time, and even when the price is eventually lowered, the buyers are wary because "nobody wants to buy real estate that nobody else wants". The result is low priced offers and an unwillingness to negotiate. Every seller wants to realize as much money as possible from the sale, but a listing priced too high often eventually sells for less than market value. An accurate market evaluation is the first step in determining a competitive listing price.

2. Failing to "Showcase" the home. A property that is not clean or well maintained is a red flag for the buyer. It is an indication that there may be hidden defects that will result in increased cost of ownership. Sellers who fail to make necessary repairs, who don't “spruce up” the house inside and out, and fail to keep it clean and neat, chase away buyers as fast as REALTORS® can bring them. Buyers are poor judges of the cost of repairs, and always build in a large margin for error when offering on such a property. Sellers are always better off doing the work themselves ahead of time.

3. Over-improving the home prior to selling. Sellers often unwittingly spend thousands of dollars doing the wrong upgrades to their home prior to attempting to sell in the mistaken belief that they will recoup this cost. If you are upgrading your home for your personal enjoyment - fine. But if you are thinking of selling, you should be aware that only certain upgrades to real estate are cost effective. Always consult with your REALTOR® BEFORE committing to upgrading your home.

4. Choosing the wrong REALTOR® or choosing for the wrong reasons. Many homeowners list with the real estate agent who tells them the highest price. You need to choose an experienced agent with the best marketing plan to sell your home. In the real estate business, an agent with many successfully closed transactions usually costs the same as someone who is inexperienced. That experience could mean a higher price at the negotiating table, selling in less time, and with a minimum amount of hassles.

5. Using the "Hard Sell" during showings. Buying a home is an emotional decision. Buyers like to "try on" a house and see if it is comfortable for them. It is difficult for them to do if you follow them around pointing out every improvement that you made. Good REALTORS® let the buyers discover the home on their own, pointing out only features they are sure are important to them. Overselling loses many sales. If buyers think they are paying for features that are not particularly important to them personally, they will reject the home in favor of a less expensive home without the features.

6. Failing to take the first offer seriously. Often sellers believe that the first offer received will be one of many to come. There is a tendency to not take it seriously, and to hold out for a higher price. This is especially true if the offer comes in soon after the home is placed on the market. Experienced REALTORS® know that more often than not the first buyer ends up being the best buyer, and many, many sellers have had to accept far less money than the initial offer later in the selling process. Real estate is most saleable early in the marketing period, and the amount buyers are willing to pay diminishes with the length of time a property has been on the market. Many sellers would give anything to find that prospective buyer who made the first, and ONLY, offer.

7. Not knowing your rights and obligations. The contract you sign to sell your property is a complex and legally binding document. An improperly written contract can allow the purchaser to void the sale, or cost you thousands of unnecessary dollars. Have an experienced REALTOR® who knows the "ins and outs" fully explain the contract you are about to sign.

8. Failure to effectively market the property. Good marketing opens the door that exposes real estate to the marketplace. It means distinguishing your home from hundreds of others on the market. It also means selling the benefits, as well as the features. The right REALTOR® will employ a wide variety of marketing activities, emphasizing the ones believed to work best for your home.

Investor Advice

2009-08-26T20:08:00.000-07:00

10 Important Tips to Successful Real Estate Investing

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

1. Compare Property Values and Rents Financial statistics only go so far; the best measure of a property's market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.

2. Be careful - Tax laws may change Don't base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize in something you Know Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you'll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know the Costs going in! Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know where your tenants are coming from If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants' security deposits at closing.

6. Assess the tax situation Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.

7. Investigate insurance coverage If seller's coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm Utility Costs Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant's rent.

9. Consult Your Accountant Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect! Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

Home Sellers: FAQ

2009-08-26T20:04:00.001-07:00

How Much is Your Home Worth?

In today's fluctuating real estate market, answering that question can be extremely complex. Generally, there are four criteria that can help homeowners determine an accurate as well as maximum selling price for their home.

The first: investigate area trends. Check with a real estate agent to determine the current selling price of homes in your area. Real estate firms generally survey properties in the surrounding areas and translate that to computerized reports divided into specific communities. Compare your home with similar homes that have sold. This should provide you with an idea of what homes are being sold for as opposed to what they are listed for.

Next, pay attention to "migration" trends and see if people (and businesses) are moving in-or out-of the area. One of the best ways to track movement is to read the business section of the local newspaper or talk to the Chamber of Commerce. If there is a lot of movement into the community, chances are home prices will be going up at a relatively rapid rate. Obviously, if there is heavy migration out, prices will be flat or could even drop.

Remember, too, that two side-by-side homes can command radically different prices.

Part of the reason can be attributed to certain features that may enhance the value of the home in the buyer's eyes. For instance, older homes that have been upgraded with new fixtures, windows or room additions command higher prices than homes that remain unchanged. In many cases, with minimal expenditure, these price-enhancing features can be added and sellers can often increase the property's value by thousands of dollars. Unchangeable elements such as lot size, or single story versus two-story can, of course, impact the value of adjoining homes.

Perhaps one of the most critical elements in selling a home, is pricing. By carefully following the local real estate market, or contacting a real estate professional, not only can sellers determine the right time to sell but, most importantly, they can also ascertain the correct price to list the property at to get it sold.

Why Do Some Homes Sell Quicker than Others?
They are priced right. Pricing is usually the number one determinant as to how short or how long a home will be on the market.

Obviously, the property has to be priced competitively, but do not set the price based upon what you heard a neighbor received for their home.

Adjacent homes can be radically different. They both may have the same floor plans, but improvements, a more desirable location in the tract, and other seemingly small variations can make a significant difference when it comes to price.

In determining the right price, one of the most important traits you need is objectivity. Homeowners, naturally, have an emotional attachment to their home, and because of their feelings they oftentimes overestimate what their home is worth.

Despite the attachment, try to be practical and logical. Make a competitive study of recent sales that are comparable to your home. Evaluate price per square foot, age, condition, location, schools, and extras.

Remember, that the value of your home can be impacted by developments that are not yet in place. Is there vacant land nearby? If so, what businesses, or structures will be erected there in the future? Is it a desirable addition to the neighborhood? If there is vacant land, visit the local planning and zoning commissions to see what might be built or, check with a local real estate professional to help you find out what development plans might be in the offing. He or she should also explain the elements that go into pricing and why. And, ask the associate about a CMA (Comparative Market Analysis) and what it means.

Remember, too, that little things can make a big difference once the home has been priced. Cosmetics are crucial. Spruce up the property as much as possible.

A little exterior paint, some new shrubbery, and making sure that the house is always neat and clean can make a tremendous difference. The most important impression is the first-and the first thing buyers see is the exterior. It should look good.

To get an idea as to how price is determined, contact a local real estate professional. Ask them to carefully choose an associate who knows your neighborhood.

In today's market, there are buyers-for homes that are priced competitively.

A lack of "action," usually indicates that your property is one of those that has been priced incorrectly. Most important, be objective. Try to look at your property as if you were a buyer going through it. What do you like? Dislike? How does it compare to other properties in the area? Is it worth more? Less?

Answer those questions objectively and you will not only be on the way to pricing your home correctly . . . but to selling it too.

Thinking About Selling Your Home?
If so, there are two ways to go about doing it -- sell it yourself or engage the professional services of a REALTOR®.

Obviously, the advantage of selling the home yourself is you do not pay a commission. But, statistics show when you team up with a real estate professional, the chances of selling your home in a shorter time span (and frequently for more money) are much better.

There are pros and cons to each technique.

To determine which road you are going to take, start by asking yourself one question - If you needed a medical operation would you perform it yourself, or have a professional do it for you?

Selling a house in today's market is not like it was a decade ago. The market, as well as consumers, are much more astute and the laws more complex. Liability and disclosure can complicate the sale.

Perhaps the biggest obstacle a seller faces when they decide to market their own property is emotional attachment. Many owners are blind to flaws that a real estate professional can see. And, a good Realtor goes further and recommends steps the homeowner can take to make the property more appealing-a fresh coast of paint in the kitchen, replacing a rusty mailbox, or removing clutter to make the home appear more open. The objective view can be the difference in making a sale.

An experienced Realtor can also provide a seller with a Comparative Market Analysis, so the owner knows what the home is actually worth, instead of what they feel it's worth.

Which Home Improvements Add?
While some home improvements can add significant dollars to the resale value of a residence, others are barely worth the investment. So how can homeowners decide which improvements will add significant value and which won't?

Here's a few tips on cost-effective improvement; upgrades that can make the difference in the sale price and add value to your property.

As a rule, kitchens and baths are the two areas that most often make the difference in a sale. They make the most impact on buyers, and definitely impact what buyers perceive the property is worth. But, kitchens and baths are not inexpensive to upgrade.

The national average for remodeling an entire kitchen is more than $20,000 with some running upwards of $30,000. Complete remodeling can include cabinets, floors, counters, sinks, appliances, lighting fixtures and new windows.

But, there's a way to put a new look on this important area without spending significant moneys. For a relatively low cost, homeowners can make spot improvements. For example, for as low as $1,000 the existing countertop can be replaced with a Formica top. For $2,500 to $3,000, the existing cabinet faces can be replaced with solid oak faces. Homeowners can buy a new sink at a home furnishing store and have a contractor install it for approximately $300 - $400. The end result is improved appearance-and usually a higher selling price for relatively minimal expenditure.

Other areas that influence price: Central air conditioning is an important feature for which buyers will usually pay extra. Room additions, on the other hand, may add value, but may not end up paying for themselves. Upgraded carpeting, top-of-the-line windows and vaulted ceilings can command higher resale prices, but it is unlikely that the seller will be able to recoup their original investment.

Existing features that have diminished with age can usually be repaired without a lot of added expense. Hardwood floors, for instance, cost $1.50 - $2.00 per square foot to refurbish, but it is a good investment because buyers are willing to pay more for the refinished appearance.

For older homes, people are more energy conscious, so improvements in the insulation of windows, doors and storm doors are smart investments.

In general, neutral, light and bright are the best rules to follow-a neutral decor, freshly painted walls and clean carpeting also help to sell a home faster.

Over Pricing Property?
A high price conveys the message that the seller may not really be interested in selling. And, when a home is priced too high, agents and buyers usually just cross it off their list and move on. After all, there are plenty of other listings.

Of course, deciding the value of a home isn't an exact science, so it's understandable that a seller might put their home on the market with an asking price that is on the high side.

Additionally, most of us believe that our homes are really "worth more" than the one down the block, around the corner or the one next door that was just sold. And, if we are wrong, we can always drop the price later, can't we? Yes, but by then, the seller may have not only lost potential buyers, but they may have also driven off interested Realtors-and Realtors are the prime source of buyers. Generally, they bring the buyers.

When a property is put up for sale, the first 30 days are the most critical. Statistics show that's when most buyers (and Realtors) see the property. Interest is highest at this time. But, the higher price the property is on the market, the fewer the prospects (and Realtors) will view it. Thus, the initial period is critical with the proper pricing.

Some sellers, however, believe that if someone is really interested they will counter-offer. Some will, some won't. Some well-qualified buyers may just walk away. The bottom line is a high priced listing will turn many buyers off.

Still, a seller wants to be confident he or she is getting the best price for their home.

The way to accomplish this is by talking to a real estate agent before listing the property. Ask for a comparative market analysis-that is, research what similar homes in the area have sold for recently. Compare your property to those, and have the agent help you calculate a fair market value. Be objective-even though it is your home.

Remember, an over-priced listing will usually result in an unsold property.

How to Make a House Look "Bigger and Better".
One sure way for you house to appear larger-and more appealing-is if clutter is eliminated and furniture and household goods are reorganized.

In fact, the time to have a garage sale is before you put your house on the market, not after it is sold! When you decide to sell, start going through your closets and cupboards, eliminating items you don't want to keep.

Do the same in the garage and backyard.

Get rid of, or store, the odds and ends. It's interesting to note that the more someone lives in a home, the more used to the clutter they become.

Unfortunately, closets, cupboards and garages brimming with "old treasures" make a home look small and cramped to a prospective buyer. Sellers should also carefully examine their furniture, and consign items that are not needed to the storage or the garage sale. Most homes occupied by the same owner for several years tend to be somewhat over-furnished. Erring on the side of space, not clutter, makes for a more marketable home.

Another "item" that adds to the clutter of a home are excess knickknacks. Scrutinize the kitchen for rarely used utensils/gadgets; miscellaneous items in closets and cupboards, even small furniture and throw rugs, that can be neatly stored.

Pack or give away clothing that will not be worn as well.

Rearrange and organize. Remove as many articles as possible from the kitchen and bathroom countertops to the cupboards below-they'll still be within handy reach in the newly created space. Organize closets. Clear off your night stands and bureaus.

Size up the arrangement of your furniture-any room for improvement there?

Examine the walls and windows. Do they need repainting or new window coverings?

For some expert, objective advice, have your real estate professional go through the home. Realtors know what enhances a property's appearance -- and what hinders it.

One last hint -- don't forget the outside. Sweep the garage and sidewalks, trim the lawn and bushes, wash all the windows, inside and out. It all helps to make your home look fresher, lighter-and larger.

How Can Two Similar Homes Vary in Price by More Than $10,000?
Forgetting, for a moment, the interior improvements that set one home apart from another, there are exterior factors that also influence price. For instance, homes on primary ingress and egress streets- (that is, the main streets that lead in and out of a tract) -generally appreciate more slowly than those within the tract that are not on primary streets.

Primary ingress/egress streets generate more traffic and are therefore, generally less desirable. Thus, they have lower prices.

Within a tract, a home on a cul-de-sac may generate a higher price for the same reason-less traffic. Cul-de-sacs are frequently like a maze and they discourage drive-throughs, which is, of course, a definite benefit to residential privacy.

Even properties on one side of a street can be worth more than a similar property across from it. Why? Certain communities, because of their name, are more prestigious than others. Beverly Hills, California, of course, is one. It is known worldwide for its high-end shopping, expensive housing and impeccable name. In sections where Beverly Hills is divided from other cities and/or communities by a street, the homes on the Beverly Hills side of the avenue command a higher price than those in the non-Beverly Hills city across from it.

Existing homes may differ radically in price for another reason-one homeowner wants to sell, and the other has to sell. The motivation for each is quite different, and so may be the pricing strategies.

Some other factors that influence price: What commercial developments are adjacent to the tract? How (un)desirable are they? And, don't forget supply and demand.

The wise buyer checks one other thing-a communities master plan. This is a must, especially if a tract (or home) is surrounded by vacant land. Most communities have one. It is usually drawn up by planners within the city of county and approved by a local planning commission. Find out what is going to be built nearby and determine how it might impact the value of the tract. All this, of course, takes time and homework. But, it is well worth it, especially when you consider that the purchase of a home is usually going to be the largest, single financial investment most people make in a lifetime.

Should you Appraise your Home Before Putting it on the Market?
It isn't necessary, but an appraisal will give a good indication of the price the seller will actually get for their property. A real estate agent can give you similar reliable data to determine current market value.

First, to determine the asking price, a seller's agent will look at the "comps," the price for which "comparable" homes in the area have recently been sold.

Based upon these prices, the seller should adjust what they are asking. For example, if similar properties in the area are selling for $210,000, then trying to get $250,000 usually does not make sense. Thus, before putting the house on the market, a seller should review the "comps," which can be obtained from a local real estate professional.
The appraisal process used by a licensed appraiser is more theoretical than a "comp," and doesn't predict what a buyer will be willing to pay. Why would anyone ever get an appraisal then? Although rarely needed by buyers or sellers, appraisals are normally required by lenders who are considering making a loan.

However, sellers of expensive, custom homes may get appraisals, because there may not be any homes in the area that compare. Buyers of these one-of-a-kind homes will also have more confidence in an asking price that is supported by an appraisal.

Before determining an asking price, sellers should give their agent a list of major improvements done to the home, such as a new roof or upgraded heating system.

This will help the agent consider all the factors when recommending a price.

It will also put him or her in a better position to sell the house-and all of its features-for the best possible price.

What is the MLS?
MLS stands for "Multiple Listing Service," which is usually a computerized listing of virtually all the homes that are for sale in a specific area.

When a Realtor lists your property for sale, they pay a fee and your home is placed on the MLS system. The big advantage to sellers is that the MLS is the #1 resource used by buyers (and agents) to locate homes.

Properties that are not listed (usually those being sold by their owners) are not on the MLS-thus there are many buyers and Realtors who will not be exposed to the home.

The MLS has become such a standard in real estate that no serious broker would think of trying to sell real estate without it. It would be like an accountant trying to work without a calculator.

About the only residential brokers who might not use the MLS are those who exclusively handle foreclosed properties, or high-end homes owned by celebrities and the like.

The MLS provides a surprising amount of detail, depending upon the area of the country it may include the location (by zip code); size of the home (square footage); size of the lot; number of bedrooms and bathrooms; extra rooms such as a den, family room, formal dining room, or enclosed patio; amenities such as a backyard, fireplace, hot tub, pool, kitchen features, new carpet and drapes; capacity of garage; age of home; and. of course, the selling price and terms.

Buyers can narrow their house-hunting searches dramatically by using the MLS. For instance, their real estate professional can do a computer search and ask for a listing of all homes within a certain location and price range that have two or three bedrooms and that are not more than ten years old. Not only will this request generate a brief list of viable possibilities, it also helps buyers gauge, roughly, what they can expect to get for their money, and to compare the value of the homes listed.

Thus, the MLS is more than a system that lists properties. It's an aid to both buyers and sellers, and is a definite asset to consumers when it comes to real estate.

What is Escrow?
Escrow is a process that begins when the purchase offer papers are signed by both parties, and ends when the loan is approved and all the necessary requirements have been fulfilled by both the buyer and the seller.

The escrow holder is an intermediary, and an agent of both the buyer and seller.

The escrow holder is given the buyer's deposit, and holds onto all funds until the agreement is finalized. They notify the seller when the deposit has been received and if the check has cleared the bank.

The escrow holder also draws up a set of instructions, itemizing things that have to be done to the property before it is sold and the title is transferred.

For example, if the seller is required to supply a termite inspection, the escrow holder would track this obligation and make it is fulfilled before any funds are transferred to the seller. Findings in the termite inspection report must be corrected on or before the close of escrow. If the report calls for a plumber, roofer or other contractor, the agent would advise the seller and get authorization for work to be done.

The escrow company is typically the title company.

The escrow/title company provides a complete ownership history of the property and any liens on record in the preliminary title report. Anything that is out of the ordinary, such as condo liens, judgments, etc. against the buyer and the seller must be clarified prior to the close of escrow.

The escrow process can be any number of days depending on what is agreed upon between the buyer and seller. To assure a timely closing, the buyer should do things like inform, the escrow holder of the name and phone number of their insurance agent as soon as possible. The homeowner insurance policy needs to be ordered early, so verification can be made with the lender. The lender will not fund a new loan without a homeowner policy. If there is a delay, the escrow process may be held up.

Closing Costs
First, the responsibility of who pays for closing costs is always negotiable. Local custom may dictate which fees the buyer will pay and those the seller pays.

Typically, the buyer pays for home inspection services and escrow, deed preparation and recording fees, depending upon what is customary for the county the property is located in. He or she may also pay for title insurance, since this is required by the lender. The buyer is also responsible for any fees or costs associated with obtaining the purchase loan.

The seller customarily pays the real estate agent's commission, as well as costs associated with transferring an unencumbered title, such as a title search, reconveyance deed and documentary transfer tax.

Often, a seller will sweeten the deal by offering a one-year home warranty.

Who will pay for what closing costs customarily differs from county to county and should always be clearly spelled out in the purchase offer. A creative sales associate will consider the cash, income and tax situation of the home seller and the buyer when constructing an offer. For instance, if the buyer is short of cash, the agent may ask the seller to pay the buyer's loan points up front in exchange for some other concessions from the buyer. In this scenario, the buyer and seller benefit and both get what they want.

1031 Exchange

2009-08-26T20:00:00.000-07:00

You may have heard of people "exchanging" their investment property to avoid huge tax bites out of their sale proceeds. An exchange of real property can be a valuable tool to defer or avoid capital gains tax on real estate transactions.

Section 1031 of the IRS Code offers real estate investors a great investment opportunity to build wealth and save taxes. By completing a 1031 exchange, you can dispose of investment property, use all of the equity to acquire replacement investment property, defer the capital gains tax that would ordinarily be paid, and leverage all of you equity into a replacement property.

Replacement property acquired in an exchange must be of "like-kind" or similar to the property being sold. The following are examples of properties that could be eligible for a 1031 exchange:
• Single Family Rental
• Multi-Family Rentals
• Farms/Ranches
• Raw Land
• Retail Offices
• Motels/Hotels
• Golf Course
• Industrial
• Leases of 30 years or more
Properties NOT eligible under 1031 include foreign property and primary residences.

1031 exchanges are primarily designed for people interested in investment properties, not for typical home sellers and buyers looking to purchase a residence.

Home Selling Tips

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Home Selling Tips

If you're thinking of selling your home, keep in mind that buyers appreciate a clean look in the homes they view. You can increase the value of your home and decrease the time it takes to sell by making a few simple improvements.

Aroma is the first thing prospective buyers notice when they step inside a home. To eliminate odors, steam clean your carpet and wash walls and floors with household cleaners and disinfectants. Keep your home smelling fresh by burning candles or potpourri, boiling a pot of cinnamon sticks or putting a dab of vanilla on cold light bulbs before turning them on.

Nothing makes a home look newer faster than painting. Painting your walls and removing outdated wallpaper may be the best interior improvements you can make. For broader appeal, paint in neutral colors such as beige, white, off-white, or gray. These colors suggest newness and cleanliness and can brighten a dull or outdated room. If your carpet is badly worn, outdated or stained, consider replacing it. If your carpet is heavily soiled, you may want to have it professionally cleaned. Brighten the interior of your home by cleaning your windows and opening your curtains to let light in. Clean hanging light fixtures and add the highest-wattage bulbs allowed. Below are 20 suggestions to help you sell your home.

Make the Most of that First Impression:
A well-manicured lawn, neatly trimmed shrubs and a clutter-free porch welcome prospects. So does a freshly painted - or at least freshly scrubbed - front door. If it's autumn, rake the leaves. If it's winter, shovel the walkways. The fewer obstacles between prospects and the true appeal of your home, the better.

Invest a Few Hours for Future Dividends:
Here's your chance to clean up in real estate. Clean up in the living room, the bathroom, the kitchen. If your woodwork is scuffed or the paint is fading, consider some minor redecoration. Fresh wallpaper adds charm and value to your property. Prospects would rather see how great your home really looks than hear how great it could look, "with a little work."

Check Faucets and Bulbs:
Dripping water rattles the nerves, discolors sinks and suggests faulty or worn-out plumbing. Burned out bulbs leave prospects in the dark. Don't let little problems detract from what's right with your home.

Don't Shut Out a Sale:
If cabinets or closet doors stick in your home, you can be sure they will also stick in a prospect's mind. Don't try to explain away sticky situations when you can easily plane them away. A little effort on your part can smooth the way toward a closing.

Think Safety:
Homeowners learn to live with all kinds of self-set booby traps: roller skates on the stairs, festooned extension cords, slippery throw rugs and low hanging overhead lights. Make your residence as non-perilous as possible for uninitiated visitors.

Make Room for Space:
Remember, potential buyers are looking for more than just comfortable living space. They're looking for storage space, too. Make sure your attic and basement are clean and free of unnecessary items.

Consider Your Closets:
The better organized a closet, the larger it appears. Now's the time to box up those unwanted clothes and donate them to charity.

Make Your Bathrooms Sparkle:
Bathrooms sell homes, so let them shine. Check and repair damaged or unsightly caulking in the tubs and showers. For added allure, display your best towels, mats and shower curtains.

Create Dream Bedrooms:
Wake up prospects to the cozy comforts of your bedrooms. For a spacious look, get rid of excess furniture. Colorful bedspreads and fresh curtains are a must.

Open up in the Daytime:
Let the sun shine in! Pull back your curtains and drapes so prospects can see how bright and cheery your home is.

Lighten up at Night:
Turn on the excitement by turning on all your lights - both inside and outside - when showing your home in the evening. Lights add color and warmth, and make prospects feel welcome.

Avoid Crowd Scenes:
Potential buyers often feel like intruders when they enter a home filled with people. Rather than giving your house the attention it deserves, they're likely to hurry through. Keep the company present to a minimum.

Watch Your Pets:
Dogs and cats are great companions, but not when you're showing your home. Pets have a talent for getting underfoot. So do everybody a favor: Keep Kitty and Spot outside, or at least out of the way.

Think Volume:
Rock-and-roll will never die. But it might kill a real estate transaction. When it's time to show your home, it's time to turn down the stereo or TV.

Relax:
Be friendly, but don't try to force conversation. Prospects want to view your home with a minimum of distraction.

Don't Apologize:
No matter how humble your abode, never apologize for its shortcomings. If a prospect volunteers a derogatory comment about your home's appearance, let an experienced Real Estate Agent handle the situation.

Keep a Low Profile:
Nobody knows your home as well as you do. But a Real Estate Agent know buyers - what they need and what they want. Your Real Estate Agent will have an easier time articulating the virtues of your home if you stay in the background.

Don't Turn Your Home into a Second-Hand Store:
When prospects come to view your home, don't distract them with offers to sell those furnishings you no longer need. You may lose the biggest sale of all.

Defer to Experience:
When prospects want to talk price, terms, or other real estate matters, let them speak to an expert - your Real Estate Agent.

Help Your Agent:
Your Real Estate Agent will have an easier time selling your home if showings are scheduled through his or her office. Offer to keep an eye on the brochure box attached to your sign and make sure it is always filled with flyers. Try to accommodate prospective buyers when they want to see your home.

Investors Tips

2009-08-26T19:51:00.000-07:00

How to Reduce Risk in Real Estate Investment.

Avoid 12 Common Mistakes Made by Novice Investors and Ensure High Rates of Return.

Real estate investment has provided many investors with positive cash flow, tax benefits and satisfaction of making an impact in others lives. Like any investment however, real estate has intricate nuances and market trends that when ignored can cause an investor tremendous heart ache. Unbelievably many first time investors are willing to part with their hard earned cash without taking the time to study their investment. They rely on traditional trends and gut feelings. Before you risk your investment take the time to learn all you can about your market. By aligning yourself with the right professional you can avoid these 12 common mistakes and you’ll ensure an excellent return on your investment.

1. Failure to Determine Your Time Need - Cash flow, capital appreciation, tax benefits, loss of management, equity paydown and pride of ownership are just some of the things that need to be addressed before you make that investment. A service minded real estate professional can be a tremendous asset by taking the time to evaluate your needs and making sure you’ve got all your bases covered.

2. Not Checking out the Seller or Sellers Agents Numbers - Claims of extremely high rates of return run rampant in real estate investment. Don’t get caught up in the excitement - check everything: rents, payment history, taxes, expenses, deposits, future modifications... everything. Make sure you have the right agent...it’s like having a good insurance policy against overlooking all the seemingly insignificant but very important details.

3. Forgetting You Are Buying a Business - Owning investment property carries with it a great potential for creating wealth and... some potentially difficult decisions. Evictions, re-investment into the property and time management all need careful consideration. Remember this is not a ‘hands off’ business.

4. Avoid Negative Cash Flow - Property that eats cash every month can drain your working capital. This can create stress, frustration and become quite painful. Predicting constant appreciation is extremely difficult if not impossible for the unseasoned investor. A strain on your cash flow may cause you to sell the investment before the benefits of ownership are ever realized.

5. Failure to do a Thorough Inspection - Look under every rock! Hire a professional inspector. Ask the tenants about pest problems, structural damage or reoccurring problems. Don’t overlook anything! A value driven real estate professional will help you find the right inspector and can help you avoid costly mistakes. When investing your hard earned money be sure and use sound business judgment!

6. Failing to Have Adequate Insurance - Investment property brings liability. Tenants, cars, parking lots, cleaning facilities, property liability - the list is quite extensive. Adequate insurance coverage is an absolute must! Be sure to consult with an insurance professional and protect your hard earned assets.

7. Inspect, Approve, and Confirm All Documents - The list of documents that need to be proofed can be overwhelming to the first time investor. Building permits, zoning laws, rental and lease applications, health licenses, laundry leases, underlying loan documents, CC&R’s, by-laws, title policies, mineral leases, inspection reports, purchase contracts, insurance.. don’t attempt to do it alone. The right professional can remove most of the stress and bring the transaction to a conclusion smoothly.

8. Get a Bill of Sale For All Property Involved - Many types of personal property (appliances, furniture, fixtures, etc.) can be involved in an investment sale. Be very detailed -know who owns what!

9. Charge Fair Rents - Vacancies, turnovers and lease terminators are your biggest expense. Charge fair rents, treat your tenants with respect and respond as quickly as possible to their needs. It’s a lot less costly in the long run to take care of the little problems before they become big problems. Vacant property is your Achilles heel.

10. Select Qualified, Good Tenants From the Start - Take the time to check references. Previous landlords, employers, financial references, credit and judgments are all vitally important. If there are any questions do a thorough investigation. Drive by their previous residence. A little work up front can save tremendous problems later.

11. Make Sure You Get Estoppel Letters - Get letters from tenants confirming the status of tenancy. Make sure their version of the rental or lease agreement corresponds with the sellers interpretation.

12. Don’t Spend Positive Cash Flow - Most of successful investors have free and clear properties. Be sure to re-invest your cash flow back into the property payment and speed up the amortization schedule. This decreases your debt load and increases your equity which builds your net worth.

Investment property can be one of the most rewarding aspects of your financial portfolio. Be certain to have all your ducks in a row before you invest. Do your homework! Consult with a professional real estate agent and protect yourself from the hidden troubles that can plague first time investors.

Home Buying Tips

2009-08-26T19:34:00.000-07:00

Tips on Buying a Home

If you're thinking about buying a home, you'll want to carefully choose the real estate professional you work with during the process.

You should commit yourself to working with one sales associate who can learn your likes and dislikes in homes to make your home-buying process easier. Choose a professional who specializes in residential real estate and who has specific knowledge of the local real estate and mortgage markets.

The person you choose should listen to you and be interested enough in you to find out about your housing needs and preferences. Service first should be the motto of the professional you choose with services going above and beyond what you expect and need. Doing some preliminary planning before you begin your home search will make the entire process more manageable and less overwhelming. As part of your initial game plan, you should:

Check your credit rating
Even if you're sure you have excellent credit, it's wise to double-check at the outset. Straightening out any errors or disputed items now will avoid troublesome holdups down the road when you're waiting for mortgage approval.

You may see disputed items, in addition to errors caused by a faulty social security number, a name similar to yours, or a court ordered judgment paid off that hasn't been cleared from the public records. If such items appear, write a letter to the appropriate credit bureau. Credit bureaus are required to help you straighten things out in a reasonable time (usually 30 days).

TIP: Make sure that any outdated derogatory entries are deleted from your credit file. Adverse credit information is not supposed to be reported or included on your credit report after seven years (except bankruptcy information, which can be reported up to 10 years).
TIP: Officially cancel inactive credit cards. If you have an inactive credit card with a $5,000 limit, even though you owe nothing on it, some mortgage lenders will consider that a potential future debt. Too many inactive credit cards with significant credit limits could keep you from obtaining a mortgage loan. Don't just cut up your extra cards; officially cancel them, and do it now so there will be time for the news to reach the credit bureaus.
TIP: Hold off on making any major credit card or car purchases while you're waiting to apply for a mortgage. Monthly payments you're obligated to pay will be counted against you, and reduce the amount of the mortgage loan you'll be offered. Even if you've been pre-approved for a mortgage, that approval is subject to last-minute evaluation of your financial situation, and a spending spree for appliances, furniture and other goodies intended for your new home may wreck your chances for buying it.

Pre-qualification and pre-approval on a mortgage
A real estate professional can help "pre-qualify" you for a mortgage before you start house-hunting. This process includes analyzing your income, assets and present debt to estimate what you may be able to afford on a house purchase. Mortgage brokers, or a lender's own mortgage counselors can also calculate the same sort of informal estimate for you.

Obtaining mortgage "pre-approval" is another thing entirely. It means that you have in hand a lender's written commitment to put together a loan for you (subject only to the particular house you want to buy passing the lender's appraisal).
Pre-approval makes you a strong buyer, welcomed by sellers. With most other purchasers, sellers must tie the house up on a contract while waiting to see if the would-be buyer can really obtain financing.

The down side is that you may pay application fees to cover the lender's paperwork in verifying your employment, income, assets, debts and credit rating. If you later decide not to use that particular lender, you'd have to start all over again elsewhere - with no rebate.

Pre-approval will also speed up the entire mortgage procedure once you've found the house you want. The only remaining question will be whether the house will "appraise" for enough to warrant the loan.

Become an educated buyer:
The web is one of the best ways to search for homes today. With this website, you can receive daily emails with new and updated listings from the towns and price range of your choice.
Search the entire MLS for all homes, condos, land, multi family, commercial properties, and past solds at your convenience.

View full listing sheets showing amenities, taxes, lot sizes, beds, baths, rooms, siding, fireplaces, garages, room sizes and much more.

Get property address and see where the properties are located on MapQuest.

Check schools and community profiles of your preferred towns.

Save preferred listings in your own file to view anytime.

Calculate approximate mortgage payments for specific properties.

Home Inspection
Once you have made an offer on a home, you will need to schedule a home inspection, conducted by an independent authorized inspector. It is extremely important to hire a reputable inspector so that you know exactly what you are buying. Do not hesitate to ask friends, family, and co-workers for advice. If you are satisfied with the results of the inspection, then you can proceed to the Purchase and Sales agreement. If the inspector finds problems with the property, you may want to negotiate with the seller to lower the price, or to pay for certain repairs.

Appraisal
Your lender may require you to get an appraisal of the house you want to buy, to make sure it is worth the money that you are borrowing. You may select your own appraiser, or you may ask your real estate broker to help you with this task.

Homeowner's Insurance
Lenders require that you have homeowners insurance, to protect both your interests and theirs. Like everything else, be sure to shop around for insurance that fits your needs.

Settlement or Closing
Finally, you are ready for the closing. Be sure to read everything before you sign! You should have both your real estate broker and an attorney present at the closing to ensure that all is in order.

Finally make sure before you buy
Making sure you end up with the right home involves figuring out exactly what features you need, want and don't want in a home. Before starting your search, you should make a "wish list" to decide which features are absolutely essential, which are nice "extras" if you happen to find them, and which are completely undesirable.

The more specific you can be about what you're looking for from the outset, the more effective your home search will be. Also keep in mind, that in the end, every home purchase is a compromise.

10 Mortgage Errors

2009-08-26T19:28:00.000-07:00

Top Ten Mistakes

If you're like most people, purchasing a home is the biggest investment you'll ever make. If you're considering buying a home, you're likely aware of the complexity of the endeavor. Because of the numerous factors to consider when purchasing a home, it's important to prepare as best you can. Some common home-buying principles and caveats are presented here for your consideration. By keeping them in mind, you'll help create a successful and more enjoyable experience. These Top Ten lists are by no means exhaustive. Since your home could cost you 25 to 40 percent of your gross income, it's important to conduct research, ask questions and study the process carefully.

Looking for a home without being pre-approved. As a potential buyer competing for a property, you'll have a better chance of getting your offer accepted by being as prepared as possible. Consider this hierarchy of preparedness:

Neither pre-qualified nor pre-approved
Pre-qualified
Pre-approved

The benefits available at each level can be easily understood when viewed from the seller's perspective. Imagine you're a seller in receipt of multiple offers to purchase your property. A complete stranger (buyer) is asking you to take your property off the market for at least the next two to three weeks while they apply for a loan. As the seller, lets consider the type of buyer you'd prefer to deal with.

Neither pre-qualified nor pre-approved
This buyer provides no evidence that they can afford to purchase your property. You may wonder how serious they are since they're not at least pre-qualified.

Pre-qualified
This buyer has met with a mortgage broker (or lender) and discussed their situation. The buyer has informed the broker regarding their income, expenses, assets and liabilities. The broker may also have seen their credit report. The buyer provided you with a letter from the broker stating an opinion of what the buyer can afford.

Pre-approved
This buyer has provided a broker written evidence of income, expenses, assets, liabilities and credit. All information has been verified by a lender. As a result, much of the paperwork for this buyer's loan has been completed. This buyer will probably be able to close quickly. They provide you with a letter (pre-approval certificate) from the lender. You're as certain as possible that this buyer can close.

As a potential buyer, you can see that being pre-approved will give you the best chance of getting your offer accepted. This is critical in a competitive situation.

Making verbal agreements. If you're asked to sign a document containing instructions contrary to your verbal agreements--don't! For example, the seller verbally agrees to include the washing machine in the sale, but the written purchase contract excludes it. The written contract will override the verbal contract. More importantly, your state may require that contracts for the sale of real property be in writing. Do not expect oral agreements to be enforceable.

Choosing a lender just because they have the lowest rate. While the rate is important, consider the total cost of your loan including the APR , loan fees, discount and origination points. When receiving a quote from a lender or broker, insist that the discount points (charged by the lender to reduce the interest rate) be distinguished from origination points (charged for services rendered in originating the loan).The cost of the mortgage, however, shouldn't be your only criterion. Have confidence that the company you select is reputable and will deliver the loan with the terms and costs they promised. If in the final hours of the transaction you determine that the lender has suddenly increased their profit margin at your expense, you won't have time to start again with a different lender. Ask family and friends for referrals. Interview prospective mortgage companies.

Not receiving a Good Faith Estimate. Within three business days after the broker or lender receives your loan application, you must receive a written statement of fees associated with the transaction. This is both the law and the best way to determine what you'll pay for your loan. Bring the Good Faith Estimate (GFE) with you when you sign loan documents. You should not be expected to pay fees which are substantially different from those contained in your GFE.

Not getting a rate lock in writing. When a mortgage company tells you they have locked your rate, get a written statement detailing the interest rate, the length of the rate lock, and program details.

Using a dual agent--i.e., an agent who represents the buyer and the seller in the same transaction. Buyers and sellers have opposing interests. Sellers want to receive the highest price, buyers want to pay the lowest price. In the standard real estate transaction, the seller pays the real estate commission. When an agent represents both buyer and seller, the agent can tend to negotiate more vigorously on behalf of the seller. As a buyer, you're better off having an agent representing you exclusively. The only time you should consider a dual agent is when you get a price break. In that case, proceed cautiously and do your homework!

Buying a home without professional inspections. Unless you're buying a new home with warranties on most equipment, it's highly recommended that you get property, roof and termite inspections. This way you'll know what you are buying. Inspection reports are great negotiating tools when asking the seller to make needed repairs. When a professional inspector recommends that certain repairs be done, the seller is more likely to agree to do them. If the seller agrees to make repairs, have your inspector verify that they are done prior to close of escrow. Do not assume that everything was done as promised.

Not shopping for home insurance until you are ready to close. Start shopping for insurance as soon as you have an accepted offer. Many buyers wait until the last minute to get insurance and do not have time to shop around.

Signing documents without reading them. Whenever possible, review in advance the documents you'll be signing. (Even though some specifics of your transaction may not be known early in the transaction, the documents you'll sign are standard forms and are available for review.) It's unlikely that you'll have sufficient time to read all the documents during the closing appointment.

Not allowing for delays in the transaction. In a perfect world, all real estate transactions close on time. In the world we live in, transactions are often delayed a week or more. Suppose you asked your landlord to terminate your lease the day your purchase transaction was scheduled to close. A day or two before your scheduled closing date, you discover your transaction is delayed a week. In a perfect world, no one is inconvenienced and your landlord is willing to work with you. More likely, however, your landlord is inconvenienced and angry. Will you be thrown out? Will you have to find interim housing for a week or more? The eviction process takes a little time, so the Sheriff won't immediately remove you, but this type of stress-producing episode can be avoided. How? Terminate your lease one week after your real estate transaction is scheduled to close. That way, if there is a delay in closing your transaction, you have some leeway. This approach might cost a little more, then again, it might not.

FICO Scores

2009-08-26T19:21:00.000-07:00

What is a FICO score?

A FICO score is a credit score developed by Fair Isaac & Co. Credit scoring is a method of determining the likelihood that credit users will pay their bills. Fair, Isaac began its pioneering work with credit scoring in the late 1950s and, since then, scoring has become widely accepted by lenders as a reliable means of credit evaluation. A credit score attempts to condense a borrowers credit history into a single number. Fair, Isaac & Co. and the credit bureaus do not reveal how these scores are computed. The Federal Trade Commission has ruled this to be acceptable.

Credit scores are calculated by using scoring models and mathematical tables that assign points for different pieces of information which best predict future credit performance. Developing these models involves studying how thousands, even millions, of people have used credit. Score-model developers find predictive factors in the data that have proven to indicate future credit performance. Models can be developed from different sources of data. Credit-bureau models are developed from information in consumer credit-bureau reports.

Credit scores analyze a borrower's credit history considering numerous factors such as:

Late payments
The amount of time credit has been established
The amount of credit used versus the amount of credit available
Length of time at present residence
Negative credit information such as bankruptcies, charge-offs, collections, etc.
There are really three FICO scores computed by data provided by each of the three bureaus––Experian, Trans Union and Equifax. Some lenders use one of these three scores, while other lenders may use the middle score.

Frequently Asked Questions

How can I increase my score? While it is difficult to increase your score over the short run, here are some tips to increase your score over a period of time.

Pay your bills on time. Late payments and collections can have a serious impact on your score.
Do not apply for credit frequently. Having a large number of inquiries on your credit report can worsen your score.
Reduce your credit-card balances. If you are "maxed" out on your credit cards, this will affect your credit score negatively.
If you have limited credit, obtain additional credit. Not having sufficient credit can negatively impact your score.

What if there is an error on my credit report? If you see an error on your report, report it to the credit bureau. The three major bureaus in the U.S., Equifax (1-800-685-1111), Trans Union (1-800-916-8800) and Experian (1-888-397-3742) all have procedures for correcting information promptly. Alternatively, your mortgage company may help you correct this problem as well.

Can I Get Rid of PMI?

2009-08-26T19:17:00.000-07:00

What is PMI?

Can I get rid of the PMI on my loan?
PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. This insurance protection is provided by private mortgage-insurance companies. It enables lenders to accept lower down payments than they would normally accept.

In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a home without a 20% down payment.

The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.

The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years before you may apply to remove it.

To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of cancelling the PMI on your loan is to refinance and to get a new loan without PMI.

Why Do Mortgage Rates Change?

2009-08-26T19:04:00.000-07:00

Why Do Mortgage Rates Change?

To understand why mortgage rates change we must first ask the more general question, "Why do interest rates change?" It is important to realize that there is not one interest rate, but many interest rates!

Prime rate: The rate offered to a bank's best customers.
Treasury bill rates: Treasury bills are short-term debt instruments used by the U.S. Government to finance their debt. Commonly called T-bills they come in denominations of 3 months, 6 months and 1 year. Each treasury bill has a corresponding interest rate (i.e. 3-month T-bill rate, 1-year T-bill rate).
Treasury Notes: Intermediate-term debt instruments used by the U.S. Government to finance their debt. They come in denominations of 2 years, 5 years and 10 years.
Treasury Bonds: Long-debt instruments used by the U.S. Government to finance its debt. Treasury bonds come in 30-year denominations.
Federal Funds Rate: Rates banks charge each other for overnight loans.
Federal Discount Rate: Rate New York Fed charges to member banks.
Libor: London Interbank Offered Rates. Average London Eurodollar rates.
6 month CD rate: The average rate that you get when you invest in a 6-month CD.
11th District Cost of Funds: Rate determined by averaging a composite of other rates.
Fannie Mae-Backed Security rates: Fannie Mae pools large quantities of mortgages, creates securities with them, and sells them as Fannie Mae-backed securities. The rates on these securities influence mortgage rates very strongly.
Ginnie Mae-Backed Security rates: Ginnie Mae pools large quantities of mortgages, secures them and sells them as Ginnie Mae-backed securities. The rates on these securities influence mortgage rates on FHA and VA loans.

Interest-rate movements are based on the simple concept of supply and demand. If the demand for credit (loans) increases, so do interest rates. This is because there are more buyers, so sellers can command a better price, i.e. higher rates. If the demand for credit reduces, then so do interest rates. This is because there are more sellers than buyers, so buyers can command a lower better price, i.e. lower rates. When the economy is expanding there is a higher demand for credit, so rates move higher, whereas when the economy is slowing the demand for credit decreases and so do interest rates.

This leads to a fundamental concept:
Bad news (i.e. a slowing economy) is good news for interest rates (i.e. lower rates).
Good news (i.e. a growing economy) is bad news for interest rates (i.e. higher rates).

A major factor driving interest rates is inflation. Higher inflation is associated with a growing economy. When the economy grows too strongly, the Federal Reserve increases interest rates to slow the economy down and reduce inflation. Inflation results from prices of goods and services increasing. When the economy is strong, there is more demand for goods and services, so the producers of those goods and services can increase prices. A strong economy therefore results in higher real-estate prices, higher rents on apartments and higher mortgage rates.

Mortgage rates tend to move in the same direction as interest rates. However, actual mortgage rates are also based on supply and demand for mortgages. The supply/demand equation for mortgage rates may be different from the supply/demand equation for interest rates. This might sometimes result in mortgage rates moving differently from other rates. For example, one lender may be forced to close additional mortgages to meet a commitment they have made. This results in them offering lower rates even though interest rates may have moved up!

There is an inverse relationship between bond prices and bond rates. This can be confusing. When bond prices move up, interest rates move down and vice versa. This is because bonds tend to have a fixed price at maturity––typically $1000. If the price of the bond is currently at $900 and there are 10 years left on the bond and if interest rates start moving higher, the price of the bond starts dropping. The higher interest rates will cause increased accumulation of interest over the next 5 years, such that a lower price (e.g. $880) will result in the same maturity price, i.e. $1000.

Rehab Loan

2009-08-21T13:47:00.000-07:00

If you are looking to get a deal on a handiman special, here is an option you should be considering.

FHA is encouraging use of its little-known 203(k) loan program. The 203(k) allows an owner-occupant to roll both a purchase and renovation into one loan, putting only 3.5% down on the home.

The program requires the use of credentialed contractors and can include cosmetic improvements as well as major renovations like replacing plumbing or electrical. Completing the application process requires patience, but in this lending environment, more homebuyers are finding 203(k)s worth the hassle.

In fiscal 2008, the government insured about 6,700 of the 203(k) loans. This year, more than 11,000 loans have already been insured, according to the Office of the Comptroller of the Currency.

Great Condo!

2009-08-16T12:03:00.000-07:00

Hayden's Reserve:

Only 1 year old, this home features every upgrade, including granite counters, hardwood floods, cherry cabinets, fireplaces, stainless steel appliances, vaulted ceilings, open kitchen, large master suite,brick front,security system, all this over looking a quite stream and nature area.

PLUS the lower level of this great home features a full in-law suite with a second full kitchen, 2 more bedrooms, and a full bath.

This 3,500 square foot home, with 4 bedrooms and 2 1/2 baths is offered at only $339,900.

Great views over looking quite stream and nature area

Large great room with vaulted ceiling, 2 sided fireplace, and windows overlooking nature area.

Open kitchen with 42" cherry cabinets, granite counter tops, stainless steel appliances, and wood floors.

Living room with fireplace and bright corner windows.

Kitchen open to great room through arched window.

Master suite features large soaking tub and separate shower.

Den has access to private bath, and can be used as fourth bedroom.

Large dining room with patio and large windows.

Large lower level with full size windows.

Lower level features second full kitchen, 2 more bedrooms, and a full bath.

Best Ranch in Dublin

2009-08-14T18:19:00.000-07:00

This former model home features every upgrade. New hardwood floors, large open kitchen, new stainless steel appliances, kitchen bay window, large great room with vaulted ceiling, dining room with column, 3 bedrooms with 3 full baths, newly finished basement. The exterior feature.

This former model features 2,192 square feet on the 1st floor, with an additional + 600 additional square feet in the finished basement.

You enter the home into an open foyer with hardwood floors, with views of the formal dining room with pillars and the large great room with vaulted ceilings and a wall of windows looking out to the large back yard. The open kitchen features ceramic floors, corian tops, stainless steel appliances, bay window, preparing island, and large counter for bar stools.

The master suite includes a private door to the 2-level deck, a vaulted ceiling, master bath with separate shower and jacuzzi tub, and walk-in closet.

The opposite side of the home features two more bedrooms and a bath.

The newly finished basement has a 3rd full bath, and plenty of room for entertaining, or additional 4th bedroom or in-law suite.

Tullymore Drive, Dublin Ohio

2009-08-13T20:45:00.000-07:00

Buy - Rent - Lease to Own

The popular Roycroft 5 level split.

The first floor of this home features wood floors, den, a 2-story great room, and a large kitchen with granite counter, stainless steel appliances, and three way fireplace open to both the kitchen and great room.

The luxury master suite features a 2-way fireplace that separate the sleep quarters from the sitting room, large his and her closets, and a large bath with separate vanities,large jacuzzi tub, and separate shower.

The large family room is complete with a full wet bar.

The top floor of this home has three more large bedroom and two full bath, and an open loft looking down to the great room.

And there are even more features, including full basement, extensive landscaping, and a 3-car garage.

All this in 4,321 finished square feet for only $469,900.

Private back yard with extensive landscaping.

Large kitchen featuring granite counter, maple cabinets, hardwood floors, and granite counter tops.

Large master suite with 2-sided fireplace and sitting room.

Luxury master bath

Surrounded by Glacier Ridge Metro Park

Dublin Home For Lease Purchase

2009-05-06T12:43:00.001-07:00

Great home in Dublin, available for sale or for lease purchase.

Over 2,550 square feet, 4 bedrooms, 2 1/2 baths, hardwoods floors, crown molding, chair rail, vaulted ceilings, large island kitchen, luxury master bath, and much, much more. All for only $278,500. Call Kyle Alfriend at (614) 395-1776

Large back yard.

Home backs to Dublin Parks Bike path, and is across the street from the Dublin Community Pool.

Extended family room, featuring masonry fireplace and vaulted ceiling.

Hardwood floors throughout foyer, living room, and formal dining room.

large open kitchen with plenty of counter space, center island, ceramic tile floors, and pantry.

Large master bath with double vanity, separate shower, and whirlpool tub.

Large Deck overlooking back yard.

Newest Listing in Dublin -- Lease Purchase Option

2008-10-27T09:21:00.000-07:00

GREAT HOME ON CUL-DE-SAC,ACROSS FROM PARK&POOL,BACK TO PARK/NATURE TRAIL, BRICK FRONT, LARGE FAM RM W/ VAULTED CEILING, OPEN FLOOR PLAN. ISLAND KITCHEN, CROWN MOLDING. WALK TO SCHOOL, NEUTRAL PAINT/CRPT, WOOD FLOORS, OAK WAINSCOTING. BUILT-IN BOOKSHELVES, LARGE DECK W/ GRILL, UPGRADED LANDSCAPING, LEASE PURCHASE OPTION