As spring approaches, many home owners grow eager to start remodeling projects to update and refresh their surroundings. Before getting started, it's a good idea to hire a professional remodeler for a workable plan and better results, according to the National Association of Home Builders (NAHB).
"A professional remodeler knows how to translate a home owner's dreams and budget into a beautiful reality," said Donna Shirey, CGR, CAPS, CGP, President of Shirey Contracting in Issaquah, Wash. and 2010 chairman of NAHB Remodelers. "They have the expertise and skills to satisfy a customer while keeping the budget in check."
Here are five tips for planning a successful home remodel that you can enjoy for many years to come.
Compile a list of home remodeling ideas and draft a budget for the work.
You likely have some projects in mind, such as modernizing the bathroom, renovating the kitchen, replacing windows or repairing the roof. Prioritize your wish list: Maybe you don't have the budget for your dream remodel, but professional remodelers can maximize your dollars by doing the work in phases, suggesting budget-friendly products and materials, and implementing creative design solutions.
Look for a professional remodeler to help plan the project.
Start by searching NAHB's Directory of Professional Remodelers at nahb.org/remodel. You'll get a list of nearby remodelers to contact. Asking friends and neighbors for names of qualified remodelers will also help you find a match for your project.
Check the references and background of the remodeler.
After you start speaking with remodelers and find one or two who match your project's needs, be sure to conduct some background research by checking with the Better Business Bureau, talking to their references, and asking if they are a trade association member (such as NAHB Remodelers). Remodelers with these qualities tend to be more reliable, better educated, and more likely to stay on top of construction and design trends.
Agree on a contract.
Talk over the details of the home remodeling project and begin reviewing the contract. You'll want to check the remodelers' insurance coverage, ask about any warranties on their work, know who is responsible for obtaining any building permits, and understand the process for making any change orders after the contract is signed. Make sure that you and your remodeler see eye to eye before you sign on the dotted line.
Take advantage of the energy efficiency tax credits.
If your remodel includes replacing windows or doors, adding insulation, installing new roofing, upgrading heating or air-conditioning units, updating the water heater, or installing energy generating products (such as solar panels, heat pumps, or wind turbines) then you can take advantage of federal energy efficiency tax credits through 2010 that will help defray costs and maximize your remodeling budget while reducing home energy bills. Written by Realty Times Staff
Friday, July 30, 2010
Wednesday, July 28, 2010
Pre-Qualifying for a Mortgage
One of the first steps to take as a potential home buyer is to get pre-qualified for a loan. This step helps both you and your lender learn just how much home you can afford. And you should begin this process before you even start looking for a home.
According to the Federal Housing Administration (FHA), their pre-qualification essentials include:
Having a steady employment history, at least two years with the same employer.
Consistent or increasing income over the past two years.
Credit report should be in good standing with less than two thirty day late payments in the past two years.
Any bankruptcy on record must be at least two years old with good credit for the two consecutive years.
Any foreclosure must be at least three years old with good credit for the past three years.
Mortgage payment qualified for must be approximately 30 percent of your total monthly gross income.
Other lenders' ideas regarding pre-qualification are all similar to those outlined above. A mortgage lender will look at your credit report, earnings, debts, and savings in order to see how much home you really can afford.
Why is this important? In recent years there has been a “mortgage crisis,” where the industry was rampant with fraud and with loans that put homeowners into situations they could not afford. As payments rose, homeowners found themselves unable to meet their monthly obligations. According to Realtytrac.com and their U.S. Foreclosure Market Report, in January 2010, one in every 409 households in the country had received a foreclosure filing.
Since pre-qualification for a home loan typically costs you nothing, but gives you both a goal of what homes are in your affordability range, as well as how much money you should look to have saved for a downpayment, you can hardly wait to take this step.
What if the home you want is out of your reach? Experts recommend reducing your debt and saving up a larger amount for your down payment. Let's say your dream home is $225,000, but you only qualify for a $180,000 loan. If you have a downpayment of $45,000, then you are ready to make a move!
During the pre-qualification process, you will be expected to provide the following information:
your gross monthly income
your total monthly payments (car payments, credit cards minimums, child support payments, student loan payments, any other monthly debts)
The lender will be looking to see that your debt to income is below about 40 percent, and the lower the better. So, if you are looking to buy in the near future, be sure to talk to your lender soon!
Written by Carla L. Davis
According to the Federal Housing Administration (FHA), their pre-qualification essentials include:
Having a steady employment history, at least two years with the same employer.
Consistent or increasing income over the past two years.
Credit report should be in good standing with less than two thirty day late payments in the past two years.
Any bankruptcy on record must be at least two years old with good credit for the two consecutive years.
Any foreclosure must be at least three years old with good credit for the past three years.
Mortgage payment qualified for must be approximately 30 percent of your total monthly gross income.
Other lenders' ideas regarding pre-qualification are all similar to those outlined above. A mortgage lender will look at your credit report, earnings, debts, and savings in order to see how much home you really can afford.
Why is this important? In recent years there has been a “mortgage crisis,” where the industry was rampant with fraud and with loans that put homeowners into situations they could not afford. As payments rose, homeowners found themselves unable to meet their monthly obligations. According to Realtytrac.com and their U.S. Foreclosure Market Report, in January 2010, one in every 409 households in the country had received a foreclosure filing.
Since pre-qualification for a home loan typically costs you nothing, but gives you both a goal of what homes are in your affordability range, as well as how much money you should look to have saved for a downpayment, you can hardly wait to take this step.
What if the home you want is out of your reach? Experts recommend reducing your debt and saving up a larger amount for your down payment. Let's say your dream home is $225,000, but you only qualify for a $180,000 loan. If you have a downpayment of $45,000, then you are ready to make a move!
During the pre-qualification process, you will be expected to provide the following information:
your gross monthly income
your total monthly payments (car payments, credit cards minimums, child support payments, student loan payments, any other monthly debts)
The lender will be looking to see that your debt to income is below about 40 percent, and the lower the better. So, if you are looking to buy in the near future, be sure to talk to your lender soon!
Written by Carla L. Davis
Monday, July 26, 2010
Does Moving Up Make Sense?
The following are some questions that will help you decide whether you’re ready for a home that’s larger or in a more desirable location than your current one.
If you answer yes to most of the questions, it’s a sign that you may be ready to move.
Have you built substantial equity in your current home?
Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.
Has your income or financial situation improved?
If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.
Have you outgrown your neighborhood?
The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job, relatives, or live in a better school district.
Are there reasons why you can’t remodel or add on?
Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.
Are you comfortable moving in the current housing market?
If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.
Are interest rates attractive?
A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.
Written by Realty Times Staff
If you answer yes to most of the questions, it’s a sign that you may be ready to move.
Have you built substantial equity in your current home?
Look at your annual mortgage statement or call your lender to find out. Usually, you don’t build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you’ve owned your home for five or more years, you may have significant, unrealized gains.
Has your income or financial situation improved?
If you’re making more money, you may be able to afford higher mortgage payments and cover the costs of moving.
Have you outgrown your neighborhood?
The neighborhood you pick for your first home might not be the same neighborhood you want to settle down in for good. For example, you may have realized that you’d like to be closer to your job, relatives, or live in a better school district.
Are there reasons why you can’t remodel or add on?
Sometimes you can create a bigger home by adding a new room or building up. But if your property isn’t large enough, your municipality doesn’t allow it, or you’re simply not interested in remodeling, then moving to a bigger home may be your best option.
Are you comfortable moving in the current housing market?
If your market is hot, your home may sell quickly and for top dollar, but the home you buy also will be more expensive. If your market is slow, finding a buyer may take longer, but you’ll have more selection and better pricing as you seek your new home.
Are interest rates attractive?
A low rate not only helps you buy a larger home, but also makes it easier to find a buyer.
Written by Realty Times Staff
Friday, July 23, 2010
Top 10 Home Buying Mistakes.
Buying a home is perhaps the most arduous, expensive and, ultimately, valuable acquisition you'll ever complete
Just one mistake could mean disaster -- perhaps the worst mistake you'll ever make.
In order to avoid titanic trip ups during such a trying transaction, buyers should get to know the most common home buying blunders.
To know them is to avoid them.
Going solo: Buying a house is a complex transaction. It should be a team effort. You'll need a REALTOR®, lender, inspector, insurer, perhaps a lawyer, and other team members to help you through each step of the way. Team build before you start the search.
Love at first sight: If you believe in fairy tales you probably shouldn't be buying a home. You won't live happily ever after if you emote your way through the home buying process. Your home should fit your real needs, not your yen for drama. Buy a home that fits your budget and your lifestyle. Be sure the home is in a community and neighborhood you desire. Visit neighborhoods several times before you buy to check out schools, noise and traffic patterns.
'Loanless' shopping: Being pre-qualified gives you a general idea of how much you can afford to borrow. It's better to be pre-approved for a given loan. Sellers will take you more seriously. You'll stay on budget.
Overbuying: Home buyers buying more than they could truly afford, in part, led to the collapse of the housing market. Buy more than you can afford and your dream home will become the same nightmare. Analyze all your monthly costs including debts, food, transportation, entertainment, and savings. Your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Don't forget to budget closing costs (often two to five percent of the home's purchase price), plus moving, redecorating and maintenance. Look ahead and allow for increases in ongoing expenses such as utilities and taxes.
Misplaced trust: You are engaged in what's likely your most valuable acquisition ever. It's a business transaction. Ask family, friends, co-workers, professionals and others you trust for referrals, but don't take their word for it. Vet your team members.
Accepting oral agreements: Get it in writing. The rate lock, the home inspection, disclosures, the contract. Always. Should a dispute arise, you've got the details documented.
Skipping the fine print: Understand what's really in any document before picking up a pen. Get documents in advance, take time to read them and ask questions. Get copies of your mortgage and closing papers a few days ahead of closing.
Forgetting or betting on resale: Avoid buying a home that costs 50 percent more than neighboring homes. Reconsider buying the most expensive home on the block. Neighbors' lower home values will weaken yours. Buy intending to flip your investment only to have the market fail means when it's time to sell your price may not cover your costs.
Making an unconditional offer: Protect yourself with these contingencies:
1. Mortgage financing: You may be preapproved but is the house? A formal appraisal confirms -- or not -- that there is sufficient value in the home to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.
2. Inspection: Never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.
3. Insurance: Confirm you can get adequate insurance coverage. In some areas, or following certain disasters, it can be difficult to get types of hazard insurance.
Written by Broderick Perkins
Just one mistake could mean disaster -- perhaps the worst mistake you'll ever make.
In order to avoid titanic trip ups during such a trying transaction, buyers should get to know the most common home buying blunders.
To know them is to avoid them.
Going solo: Buying a house is a complex transaction. It should be a team effort. You'll need a REALTOR®, lender, inspector, insurer, perhaps a lawyer, and other team members to help you through each step of the way. Team build before you start the search.
Love at first sight: If you believe in fairy tales you probably shouldn't be buying a home. You won't live happily ever after if you emote your way through the home buying process. Your home should fit your real needs, not your yen for drama. Buy a home that fits your budget and your lifestyle. Be sure the home is in a community and neighborhood you desire. Visit neighborhoods several times before you buy to check out schools, noise and traffic patterns.
'Loanless' shopping: Being pre-qualified gives you a general idea of how much you can afford to borrow. It's better to be pre-approved for a given loan. Sellers will take you more seriously. You'll stay on budget.
Overbuying: Home buyers buying more than they could truly afford, in part, led to the collapse of the housing market. Buy more than you can afford and your dream home will become the same nightmare. Analyze all your monthly costs including debts, food, transportation, entertainment, and savings. Your total monthly debts, including your mortgage, should not exceed 36 percent of your income before taxes. Don't forget to budget closing costs (often two to five percent of the home's purchase price), plus moving, redecorating and maintenance. Look ahead and allow for increases in ongoing expenses such as utilities and taxes.
Misplaced trust: You are engaged in what's likely your most valuable acquisition ever. It's a business transaction. Ask family, friends, co-workers, professionals and others you trust for referrals, but don't take their word for it. Vet your team members.
Accepting oral agreements: Get it in writing. The rate lock, the home inspection, disclosures, the contract. Always. Should a dispute arise, you've got the details documented.
Skipping the fine print: Understand what's really in any document before picking up a pen. Get documents in advance, take time to read them and ask questions. Get copies of your mortgage and closing papers a few days ahead of closing.
Forgetting or betting on resale: Avoid buying a home that costs 50 percent more than neighboring homes. Reconsider buying the most expensive home on the block. Neighbors' lower home values will weaken yours. Buy intending to flip your investment only to have the market fail means when it's time to sell your price may not cover your costs.
Making an unconditional offer: Protect yourself with these contingencies:
1. Mortgage financing: You may be preapproved but is the house? A formal appraisal confirms -- or not -- that there is sufficient value in the home to warrant the loan. If the house appraises lower than the sales price, the loan may be declined.
2. Inspection: Never buy an existing or new home without a thorough home inspection. Walk through the home with the inspector to learn more about the house and any concerns he or she may have.
3. Insurance: Confirm you can get adequate insurance coverage. In some areas, or following certain disasters, it can be difficult to get types of hazard insurance.
Written by Broderick Perkins
Wednesday, July 21, 2010
Top 10 Tips for Satging a Home
Provided your home-for-sale has the curb appeal to get potential buyers inside, keeping them inside for a further look requires a staging strategy that sticks the deal.
HGTV's FrontDoor.com offers what it considers the Top 10 tips that can turn a languishing listing to a multiple offer attraction.
Reclaim the yard. First impressions rule. Spruce up curb appeal by maintaining a clean yard, adding plants for a splash of color and applying a fresh coat of paint to the front door.
Let the foyer flourish. The home portal sets the tone for the entire home. Make the space up-to-date, well-maintained and eye catching -- top to bottom.
Back off beige. Don't let neutral colored walls dominate a room. Splashes of color liven up boring spaces. Throw pillows, artwork and fresh flowers add pops of color and personality.
Cure kitchen craziness. Consistency pleases. All countertops and cabinets should match. New hardware, a new backsplash and a thorough cleaning can transform a bleak kitchen into one with smiles.
Denude the dining room. De-cluttering and depersonalizing is the first rule of home staging. Homebuyers can have trouble envisioning themselves living in a home that's full of the seller's personal items.
Avoid focal point faux-pas. Highlight the great features in a home by positioning furniture to highlight them. Windows, fireplaces and other architectural details will be noticed by a buyer if they are emphasized in the home correctly.
Perk up the patio. The outdoor space is an extension of the home. Capture a higher selling price by cleaning and adding style to any outdoor space with furniture, lighting and accessories.
Master the master suite. The best approach to staging is often working with existing accessories. Using what is already in the room and repositioning the furniture will highlight the room’s best features.
Cure bathroom blues. Older vanities and dreadful wallpaper will make any bathroom feel outdated. Apply a fresh coat of neutral-hued paint and new hardware to modernize and brighten.
Repurpose extra rooms. The value of a space decreases when homebuyers see a room without direction (think part office, part playroom, part home gym). Though almost every homeowner is guilty of having a "junk room," take sure to stage each room with a clear purpose before putting the home on the market.
Written by Broderick Perkins
HGTV's FrontDoor.com offers what it considers the Top 10 tips that can turn a languishing listing to a multiple offer attraction.
Reclaim the yard. First impressions rule. Spruce up curb appeal by maintaining a clean yard, adding plants for a splash of color and applying a fresh coat of paint to the front door.
Let the foyer flourish. The home portal sets the tone for the entire home. Make the space up-to-date, well-maintained and eye catching -- top to bottom.
Back off beige. Don't let neutral colored walls dominate a room. Splashes of color liven up boring spaces. Throw pillows, artwork and fresh flowers add pops of color and personality.
Cure kitchen craziness. Consistency pleases. All countertops and cabinets should match. New hardware, a new backsplash and a thorough cleaning can transform a bleak kitchen into one with smiles.
Denude the dining room. De-cluttering and depersonalizing is the first rule of home staging. Homebuyers can have trouble envisioning themselves living in a home that's full of the seller's personal items.
Avoid focal point faux-pas. Highlight the great features in a home by positioning furniture to highlight them. Windows, fireplaces and other architectural details will be noticed by a buyer if they are emphasized in the home correctly.
Perk up the patio. The outdoor space is an extension of the home. Capture a higher selling price by cleaning and adding style to any outdoor space with furniture, lighting and accessories.
Master the master suite. The best approach to staging is often working with existing accessories. Using what is already in the room and repositioning the furniture will highlight the room’s best features.
Cure bathroom blues. Older vanities and dreadful wallpaper will make any bathroom feel outdated. Apply a fresh coat of neutral-hued paint and new hardware to modernize and brighten.
Repurpose extra rooms. The value of a space decreases when homebuyers see a room without direction (think part office, part playroom, part home gym). Though almost every homeowner is guilty of having a "junk room," take sure to stage each room with a clear purpose before putting the home on the market.
Written by Broderick Perkins
Monday, July 19, 2010
Common Buyers Fears.
Whether you are a first time home buyer or someone who is looking to move up or down, getting into the market can be a fearful time.
Here are some of the most common buyer fears:
Do I have enough money to buy a home?
To first step to finding out how much home you can truly afford is to get pre-qualified for a mortgage.
Also, take a step back and look at your finances. Ideally, you should have around 20 percent of the purchase price to put down. You should also have less than a 36 percent debt to income ratio. Be sure to include all of your monthly obligations in that equation, including student loans, child support payments, alimony, car payments, credit cards, etc.
Once you've looked at your savings, make sure that apart from your down payment, you'll have enough left over to pay closing costs, which include such things as attorney fees and transfer fees. The National Association of Realtors (NAR) reports that this amount averages between 2 and 7 percent of the home price. You also need to have money left as a cushion. What if unexpected repairs, either to your house or car, come up? What if you or a family member needs medical attention? Be sure that you have enough money leftover after the purchase to keep your life running smoothly.
Will I have buyer's remorse?
There is no such thing as the perfect house, so you should prepare yourself for some mild feelings of "what if". You may have to give up a few "wants" to get a few "needs" when you buy your next home. Or if this is your first purchase, you may have to buy something a little short of your dream house, and build equity in order to move up at a later date. Try not to lose sight of the big picture. This is a home that you own. You now get the benefits of tax breaks. You are building equity as you pay off the loan. And, hopefully, your home will appreciate in value over the coming years.
How can an unhandy owner handle repairs?
Before you swear off doing some of your own projects or repairs, know that everyone starts somewhere. Take a class at your local home improvement store, invest is a handyman's guide, or ask a friend that has already tiled their bathroom or fixed a leaky sink to come and give you some pointers.
Be prepared for repairs, maintenance, and updates. Even with a new home, there will be projects. Plan accordingly financially. And if all else fails, hire a professional.
What if I need to move?
Experts recommends that to build equity, you need to have owned your home for at least 3 to 5 years. The NAR recommends, "Look at your annual mortgage statement or call your lender to find out. Usually, you don't build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you've owned your home for five or more years, you may have significant, unrealized gains." If the time is less than five years, then you should be prepared to not make any money on the sale of your home, and even, to "lose" some -- in the form of closing costs.
Written by Carla L. Davis
Here are some of the most common buyer fears:
Do I have enough money to buy a home?
To first step to finding out how much home you can truly afford is to get pre-qualified for a mortgage.
Also, take a step back and look at your finances. Ideally, you should have around 20 percent of the purchase price to put down. You should also have less than a 36 percent debt to income ratio. Be sure to include all of your monthly obligations in that equation, including student loans, child support payments, alimony, car payments, credit cards, etc.
Once you've looked at your savings, make sure that apart from your down payment, you'll have enough left over to pay closing costs, which include such things as attorney fees and transfer fees. The National Association of Realtors (NAR) reports that this amount averages between 2 and 7 percent of the home price. You also need to have money left as a cushion. What if unexpected repairs, either to your house or car, come up? What if you or a family member needs medical attention? Be sure that you have enough money leftover after the purchase to keep your life running smoothly.
Will I have buyer's remorse?
There is no such thing as the perfect house, so you should prepare yourself for some mild feelings of "what if". You may have to give up a few "wants" to get a few "needs" when you buy your next home. Or if this is your first purchase, you may have to buy something a little short of your dream house, and build equity in order to move up at a later date. Try not to lose sight of the big picture. This is a home that you own. You now get the benefits of tax breaks. You are building equity as you pay off the loan. And, hopefully, your home will appreciate in value over the coming years.
How can an unhandy owner handle repairs?
Before you swear off doing some of your own projects or repairs, know that everyone starts somewhere. Take a class at your local home improvement store, invest is a handyman's guide, or ask a friend that has already tiled their bathroom or fixed a leaky sink to come and give you some pointers.
Be prepared for repairs, maintenance, and updates. Even with a new home, there will be projects. Plan accordingly financially. And if all else fails, hire a professional.
What if I need to move?
Experts recommends that to build equity, you need to have owned your home for at least 3 to 5 years. The NAR recommends, "Look at your annual mortgage statement or call your lender to find out. Usually, you don't build up much equity in the first few years of your mortgage, as monthly payments are mostly interest, but if you've owned your home for five or more years, you may have significant, unrealized gains." If the time is less than five years, then you should be prepared to not make any money on the sale of your home, and even, to "lose" some -- in the form of closing costs.
Written by Carla L. Davis
Friday, July 16, 2010
Five Key Areas to Pay Attention to When Buying a Home.
Looking for a new home can be exciting and frustrating. You can help alleviate the frustration by paying close attention to five key areas of the homes you're considering buying; it may save you money in the long run.
Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.
Electrical
Walker says sometimes homeowners assume with newer homes that all will work just fine but that's often not the case. "I inspected a brand new house—four years old but the electrical was all done incorrectly," says Walker.
Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you're browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.
Foundation
Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. "It was a model home. What the homeowners did was plant trees for shade to make it look really nice, but they planted the wrong trees and they're going to crack the foundation and it's going to cut the property value down by $50,000," says Walker.
Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. "As you walk through the house, 21 feet in and 30 feet deep, there's just too much root invasion and it's going to ruin their tile," explains Walker.
He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, "which means the foundation is moving."
However, just because you see cracks doesn't mean there is a foundation problem. "Most people don't understand that there are natural cracks in a house. That's why when we do an inspection report we have to look at it and say 'Okay, this is a typical crack and this one is an untypical crack,'" says Walker. He says some cracks may lead to other problems while others won't.
Plumbing
Walker says another big area of concern is the plumbing. It's an area that you can't always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. "Mold forms underneath sinks when people have a leak and they fix the pipe but they don't take care of the mold," says Walker.
He says things like caulking the sink can help prevent mold. "That's my number one thing I always find—bad sinks," says Walker.
He says that when you look at the sink, look behind it and most of the time you will discover a little crack. "What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it's in a perfect position to create mold," says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.
Attic
"You can tell everything about the house by the attic," says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. "In the attic you can tell where all the damage has been," says Walker.
"If you're in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced," says Walker. He adds, "You can tell if the roof is good because you can look right at the wood."
Landscaping
"There should not be moisture or plants next to your house," says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.
Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.
Written by Carla Davis
Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.
Electrical
Walker says sometimes homeowners assume with newer homes that all will work just fine but that's often not the case. "I inspected a brand new house—four years old but the electrical was all done incorrectly," says Walker.
Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you're browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.
Foundation
Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. "It was a model home. What the homeowners did was plant trees for shade to make it look really nice, but they planted the wrong trees and they're going to crack the foundation and it's going to cut the property value down by $50,000," says Walker.
Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. "As you walk through the house, 21 feet in and 30 feet deep, there's just too much root invasion and it's going to ruin their tile," explains Walker.
He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, "which means the foundation is moving."
However, just because you see cracks doesn't mean there is a foundation problem. "Most people don't understand that there are natural cracks in a house. That's why when we do an inspection report we have to look at it and say 'Okay, this is a typical crack and this one is an untypical crack,'" says Walker. He says some cracks may lead to other problems while others won't.
Plumbing
Walker says another big area of concern is the plumbing. It's an area that you can't always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. "Mold forms underneath sinks when people have a leak and they fix the pipe but they don't take care of the mold," says Walker.
He says things like caulking the sink can help prevent mold. "That's my number one thing I always find—bad sinks," says Walker.
He says that when you look at the sink, look behind it and most of the time you will discover a little crack. "What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it's in a perfect position to create mold," says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.
Attic
"You can tell everything about the house by the attic," says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. "In the attic you can tell where all the damage has been," says Walker.
"If you're in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced," says Walker. He adds, "You can tell if the roof is good because you can look right at the wood."
Landscaping
"There should not be moisture or plants next to your house," says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.
Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.
Written by Carla Davis
Wednesday, July 14, 2010
Buyers Should Be Careful About Credit Use Prior to Closing.
Buyers and their agents need to be aware that it is a very bad idea for buyers to increase their credit balances or to open new lines of credit shortly before they close escrow on their new home. More specifically, they should avoid such activity during the period of time between loan application and closing. This is because policies under Fannie Mae's Loan Quality Initiative, effective June 1, 2010, requires lenders to "refresh" a borrower's credit report just prior to closing.
Here's what happens: Bill and Betty Buyer are excited to make an offer on a home they just love. They realized that they are stretching, but the loan officer has pre-qualified them and is confident that they will receive full loan approval. When formal loan approval comes, then, they are ecstatic. In eager anticipation of closing, they visit their favorite furniture store and purchase (that is, charge) a new bedroom set, dining room furniture, and a sectional that will be perfect for the family room. It all adds up to a pretty penny, but they are confident that they will be able to pay it off in a timely manner. Things are going well at work. What could go wrong?
Well, here's one thing that could go wrong: Following FNMA's guidelines, the lender runs an updated credit report on Bill and Betty just before closing. With their newly-acquired credit balance, Bill and Betty no longer meet the required debt-to-income (DTI) ratio in order to qualify for their loan. The loan is pulled. Sadness reigns.
Fannie Mae's Loan Quality Initiative was introduced in a lender letter February 26, 2010. The letter noted that, during the past three years, the need had been highlighted "for an improved approach for working with lenders to deliver loans that meet Fannie Mae's underwriting and eligibility guidelines." In other words, the loans that had been delivered to Fannie Mae turned out too often not to meet Fannie Mae guidelines. Regrettably, this tended to be discovered well after Fannie Mae had purchased the loan. The idea of the Loan Quality Initiative, which was to become effective June 1, 2010, was to focus "on capturing critical loan data earlier in the process and validating it before, during, and immediately after loan delivery."
Borrower qualification was not the only issue of concern. Among others were determining owner occupancy, verification of social security numbers, a new policy on excluding certain entities from Fannie Mae loans, and updated quality-control requirements.
Technically speaking, the Fannie Mae guidelines do not require that updated ("refreshed") credit checks be performed for borrowers. Fannie Mae states that "It is the lender's responsibility to develop and implement its own business processes to support compliance with Fannie Mae's requirements on loans delivered to Fannie Mae." But, in the same memo, Fannie Mae does provide "tips for lenders to consider." One of those tips is "Refreshing a credit report just prior to closing."
Does anyone think that a lender who sells its loans to Fannie Mae is going to ignore such tips? Hardly.
The tips point out that not only might a refreshed credit report show newly-acquired debt (as in the example), but also that it may show new credit inquiries. "Credit inquiries listed on the credit report should be investigated to determine whether the borrower did in fact open additional credit resulting in repayment obligations." Don't go buy a new car until after you close.
Given recent history, it would be unreasonable to fault Fannie Mae for tightening up its procedures in every way possible. Buyers just need to remember that loan approval is based on statements of income and liabilities at the time of the loan application. If those factors change materially prior to closing, it is likely to be discovered and it could undo a deal.
Congratulations on your new home, and go ahead and buy new furniture; but wait until after escrow has closed.
Written by Bob Hunt
Here's what happens: Bill and Betty Buyer are excited to make an offer on a home they just love. They realized that they are stretching, but the loan officer has pre-qualified them and is confident that they will receive full loan approval. When formal loan approval comes, then, they are ecstatic. In eager anticipation of closing, they visit their favorite furniture store and purchase (that is, charge) a new bedroom set, dining room furniture, and a sectional that will be perfect for the family room. It all adds up to a pretty penny, but they are confident that they will be able to pay it off in a timely manner. Things are going well at work. What could go wrong?
Well, here's one thing that could go wrong: Following FNMA's guidelines, the lender runs an updated credit report on Bill and Betty just before closing. With their newly-acquired credit balance, Bill and Betty no longer meet the required debt-to-income (DTI) ratio in order to qualify for their loan. The loan is pulled. Sadness reigns.
Fannie Mae's Loan Quality Initiative was introduced in a lender letter February 26, 2010. The letter noted that, during the past three years, the need had been highlighted "for an improved approach for working with lenders to deliver loans that meet Fannie Mae's underwriting and eligibility guidelines." In other words, the loans that had been delivered to Fannie Mae turned out too often not to meet Fannie Mae guidelines. Regrettably, this tended to be discovered well after Fannie Mae had purchased the loan. The idea of the Loan Quality Initiative, which was to become effective June 1, 2010, was to focus "on capturing critical loan data earlier in the process and validating it before, during, and immediately after loan delivery."
Borrower qualification was not the only issue of concern. Among others were determining owner occupancy, verification of social security numbers, a new policy on excluding certain entities from Fannie Mae loans, and updated quality-control requirements.
Technically speaking, the Fannie Mae guidelines do not require that updated ("refreshed") credit checks be performed for borrowers. Fannie Mae states that "It is the lender's responsibility to develop and implement its own business processes to support compliance with Fannie Mae's requirements on loans delivered to Fannie Mae." But, in the same memo, Fannie Mae does provide "tips for lenders to consider." One of those tips is "Refreshing a credit report just prior to closing."
Does anyone think that a lender who sells its loans to Fannie Mae is going to ignore such tips? Hardly.
The tips point out that not only might a refreshed credit report show newly-acquired debt (as in the example), but also that it may show new credit inquiries. "Credit inquiries listed on the credit report should be investigated to determine whether the borrower did in fact open additional credit resulting in repayment obligations." Don't go buy a new car until after you close.
Given recent history, it would be unreasonable to fault Fannie Mae for tightening up its procedures in every way possible. Buyers just need to remember that loan approval is based on statements of income and liabilities at the time of the loan application. If those factors change materially prior to closing, it is likely to be discovered and it could undo a deal.
Congratulations on your new home, and go ahead and buy new furniture; but wait until after escrow has closed.
Written by Bob Hunt
Monday, July 12, 2010
Home Warranty FAQ's
Home warranties are on the rise. Let's take a moment to look at some of the most common questions regarding these products.
What is a home warranty?
A home warranty is a residential service contract giving the homeowner repair and replacement coverage for major operating systems and appliances in a home. These repairs must be due to wear and tear, and not negligence or damage.
How can you benefit from a home warranty?
Repairs to homes are inevitable. And while homeowners cross their fingers in hopes that these repairs are relatively inexpensive, what if an entire system needs replaced, and you are left staring at a bill with a few too many zeros? A home warranty can offer you some level of protection.
Your home warranty plan also provides you with a selected network of professionals from which to choose. Many homeowners prefer having a list to choose from instead of taking a guess at which repair company will be reliable.
According to the Service Contract Industry Council (SCIC), a home warranty, also called a home service contract, offers many benefits to buyers and sellers, including:
Repair or replacement coverage of most major appliances and home systems including heating, plumbing, and electrical;
Toll-free access to technical support and prequalified repair professionals;
Comfort for new owners and protection for sellers while their property is on the market;
Optional coverage for structural components such as roofs; recreational equipment such as swimming pools; etc.
Ability to transfer the contract from homeowner to buyer.
What are the average costs of a home warranty? MSN Money says you will be looking to spend somewhere from $250 to $600. And then expect to spend from $25 to $75 for each service visit.
What isn't covered?
According to The Home Warranty Review, you should make sure you get any repairs approved by your warranty company prior to calling a repair company. This will help to ensure you are reimbursed. Keep in mind that pre-existing conditions, improperly installed or mismatched equipment, and poorly maintained systems are not usually covered.
Warranties also do not cover "acts of God." This means the pet damage, the graffiti, and the lightning strike are your own responsibility.
Keep in mind, as well, that items "outside the perimeter" of your home may also be off limits. The Review writes, "Some people are surprised to learn that the plumbing leak in the yard is not covered."
How have home warranty changed in our current economy?
According to the SCIC director, Timonty Meenan, there was a "significant increase in home warranty contract renewals in 2009. Existing homeowners fueled the increase over the previous year, while sales by real estate professionals to home sellers and buyers held nearly steady."
Florida broker/owner Ed Smith has seen a jump in home warranties sales over the past five years, noting, "buyers and sellers have come to understand the benefits of home warranties and there are plenty of customer testimonials demonstrating their value. It's both a good marketing tool for selling and good protection policy for buyers and sellers."
How do I choose a company?
MSN Money reporter, Liz Pulliam Westom, gives you three helpful tips.
Find out which government agency, if any, regulates home warranty companies in your state and check its complaint records.
If regulation is loose or nonexistent, pick a company that has a long track history in your state and solid financials. (If the company is public, you can ask for an annual report to see if its home warranty operations are making a profit.)
If someone else -- the home seller or a real estate agent -- is paying for the policy, insist that the warranty premium be paid in full for the term of the agreement before the sale closes. Check to be sure the amount is listed on the final escrow statement.
A final tip for anyone considering a home warranty, is to read carefully. A warranty is a contractual agreement, and like all contracts, you should know what you are signing. Warranties can vary in price and coverage depending on the company you choose, so be sure to shop around before signing on the dotted line.
Written by Carla Hill
What is a home warranty?
A home warranty is a residential service contract giving the homeowner repair and replacement coverage for major operating systems and appliances in a home. These repairs must be due to wear and tear, and not negligence or damage.
How can you benefit from a home warranty?
Repairs to homes are inevitable. And while homeowners cross their fingers in hopes that these repairs are relatively inexpensive, what if an entire system needs replaced, and you are left staring at a bill with a few too many zeros? A home warranty can offer you some level of protection.
Your home warranty plan also provides you with a selected network of professionals from which to choose. Many homeowners prefer having a list to choose from instead of taking a guess at which repair company will be reliable.
According to the Service Contract Industry Council (SCIC), a home warranty, also called a home service contract, offers many benefits to buyers and sellers, including:
Repair or replacement coverage of most major appliances and home systems including heating, plumbing, and electrical;
Toll-free access to technical support and prequalified repair professionals;
Comfort for new owners and protection for sellers while their property is on the market;
Optional coverage for structural components such as roofs; recreational equipment such as swimming pools; etc.
Ability to transfer the contract from homeowner to buyer.
What are the average costs of a home warranty? MSN Money says you will be looking to spend somewhere from $250 to $600. And then expect to spend from $25 to $75 for each service visit.
What isn't covered?
According to The Home Warranty Review, you should make sure you get any repairs approved by your warranty company prior to calling a repair company. This will help to ensure you are reimbursed. Keep in mind that pre-existing conditions, improperly installed or mismatched equipment, and poorly maintained systems are not usually covered.
Warranties also do not cover "acts of God." This means the pet damage, the graffiti, and the lightning strike are your own responsibility.
Keep in mind, as well, that items "outside the perimeter" of your home may also be off limits. The Review writes, "Some people are surprised to learn that the plumbing leak in the yard is not covered."
How have home warranty changed in our current economy?
According to the SCIC director, Timonty Meenan, there was a "significant increase in home warranty contract renewals in 2009. Existing homeowners fueled the increase over the previous year, while sales by real estate professionals to home sellers and buyers held nearly steady."
Florida broker/owner Ed Smith has seen a jump in home warranties sales over the past five years, noting, "buyers and sellers have come to understand the benefits of home warranties and there are plenty of customer testimonials demonstrating their value. It's both a good marketing tool for selling and good protection policy for buyers and sellers."
How do I choose a company?
MSN Money reporter, Liz Pulliam Westom, gives you three helpful tips.
Find out which government agency, if any, regulates home warranty companies in your state and check its complaint records.
If regulation is loose or nonexistent, pick a company that has a long track history in your state and solid financials. (If the company is public, you can ask for an annual report to see if its home warranty operations are making a profit.)
If someone else -- the home seller or a real estate agent -- is paying for the policy, insist that the warranty premium be paid in full for the term of the agreement before the sale closes. Check to be sure the amount is listed on the final escrow statement.
A final tip for anyone considering a home warranty, is to read carefully. A warranty is a contractual agreement, and like all contracts, you should know what you are signing. Warranties can vary in price and coverage depending on the company you choose, so be sure to shop around before signing on the dotted line.
Written by Carla Hill
Saturday, July 10, 2010
Choosing The Best Home
After weeks of searching for your next home, you now have it narrowed down to two great options. One offers a shorter commute, but the other offers more square footage for your growing family. How can you make the best choice?
There are several strategies you can employ in your decision making process. Above all, be confident in your decision making abilities. "The fear of making serious decisions is a new kind of fear, called decidophobia," proclaimed by Walter Kaufmann at Princeton University in 1973. Worry and procrastination do nothing to aid the process, so buyers, be confident that you will make a sound choice.
Pro/Con list: In this case, you are deciding between two houses as your prospective home. For each house, divide a sheet of paper into two columns: pro and con. Be realistic about what the positive and negative factors would be for each purchase. Considerations could include: price, location, schools, repairs, square footage, floorplans, street noise, neighborhood value, comparables, and gut intuition.
Brainstorm scenarios: Chances are, whatever house you decided upon will be your residence for many years to come. Try and think ahead to situations that may arise in the future, and how each residence would affect those situations. Do you have aging parents that could move in? If so, then which house provides the best floorplan for this? Planning on having children? Check out ratings on local schools.
Do the math: Business executives might call this the "cost/benefit analysis." Buying a home is a huge financial decision, and while personal preferences (e.g. location, schools, square footage) all come into play in homebuying, many purchases are based on what makes the best financial sense. Discuss numbers and neighborhood comparables with your real estate agent. One home may be a smaller dollar amount, but the other may be a better deal in the long run. Some neighborhoods are up and coming, while others have come and gone. Are either homes overpriced or underpriced for their neighborhoods? Do either homes need repairs or updates?
Priorities list: Yes, you know you want the pool, landscaping, granite counters, close proximity to work, extra bath, and the list goes on. But when push comes to shove, and it might, what items are your priority, really? For some, driving a longer commute is worth having a larger house or a cheaper price. For other buyers, the exact opposite can be true.
Change perspectives: Sometimes you simply must step out of your own shoes to see a situation clearly. There are many different ways to approach this decision. You can look at it from an emotional point of view (which home do you love), an intuitive view (what does your gut tell you), and even a devil's advocate view (what if). Experts consider this the "Six Thinking Hats," introduced by Edward de Bono in a book of the same title, where you put on six different hats during a decision making process. Try and see the buying process from the perspective of your spouse, your children, friends, and even your worst enemy.
Finally, be realistic in your own abilities. While the final decision rests on your capable shoulders, you should rely on the professionals that are by your side. This includes your agent, lender, attorney, and even your family. And while you are the final say, remember that you have a team to help give you information to fuel that sound decision.
Written by Carla Hill
There are several strategies you can employ in your decision making process. Above all, be confident in your decision making abilities. "The fear of making serious decisions is a new kind of fear, called decidophobia," proclaimed by Walter Kaufmann at Princeton University in 1973. Worry and procrastination do nothing to aid the process, so buyers, be confident that you will make a sound choice.
Pro/Con list: In this case, you are deciding between two houses as your prospective home. For each house, divide a sheet of paper into two columns: pro and con. Be realistic about what the positive and negative factors would be for each purchase. Considerations could include: price, location, schools, repairs, square footage, floorplans, street noise, neighborhood value, comparables, and gut intuition.
Brainstorm scenarios: Chances are, whatever house you decided upon will be your residence for many years to come. Try and think ahead to situations that may arise in the future, and how each residence would affect those situations. Do you have aging parents that could move in? If so, then which house provides the best floorplan for this? Planning on having children? Check out ratings on local schools.
Do the math: Business executives might call this the "cost/benefit analysis." Buying a home is a huge financial decision, and while personal preferences (e.g. location, schools, square footage) all come into play in homebuying, many purchases are based on what makes the best financial sense. Discuss numbers and neighborhood comparables with your real estate agent. One home may be a smaller dollar amount, but the other may be a better deal in the long run. Some neighborhoods are up and coming, while others have come and gone. Are either homes overpriced or underpriced for their neighborhoods? Do either homes need repairs or updates?
Priorities list: Yes, you know you want the pool, landscaping, granite counters, close proximity to work, extra bath, and the list goes on. But when push comes to shove, and it might, what items are your priority, really? For some, driving a longer commute is worth having a larger house or a cheaper price. For other buyers, the exact opposite can be true.
Change perspectives: Sometimes you simply must step out of your own shoes to see a situation clearly. There are many different ways to approach this decision. You can look at it from an emotional point of view (which home do you love), an intuitive view (what does your gut tell you), and even a devil's advocate view (what if). Experts consider this the "Six Thinking Hats," introduced by Edward de Bono in a book of the same title, where you put on six different hats during a decision making process. Try and see the buying process from the perspective of your spouse, your children, friends, and even your worst enemy.
Finally, be realistic in your own abilities. While the final decision rests on your capable shoulders, you should rely on the professionals that are by your side. This includes your agent, lender, attorney, and even your family. And while you are the final say, remember that you have a team to help give you information to fuel that sound decision.
Written by Carla Hill
Wednesday, July 7, 2010
Debunking Credit Score Myths
In March, ING Direct bank commissioned Harris Interactive to conduct an online survey of 1,042 parents of children age 17 years and younger.
The survey discovered more than half, 56 percent, of those surveyed thought bouncing a check or paying a fee for having non-sufficient funds in their bank account would reduce their credit scores.
Wrong.
Credit reports typically don't include information about checking and debit accounts, nor non-sufficient fund issues unless they somehow impact an attached credit account.
Also one in five (21 percent) thought checking their credit scores would hurt credit scores. Nearly as many (18 percent) thought accessing their credit report, would hurt their credit scores.
Wrong and wrong.
Obtaining your credit report and credit score has no bearing on your credit standing.
In fact, you should check your credit reports regularly. Every year, federal regulations allow you three free credit reports (ONLY through AnnualCreditReport.com), one each from the three credit reporting agencies, Equifax, Experian and TransUnion.
If you visit some other sound-alike, come-on web site, instead of AnnualCreditReport.com, expect to pay for credit services you may not need in exchange for that so-called "free" report.
From AnnualCreditReport.com, get the three free reports all at once if you haven't seen them for years. Otherwise get one from a different company every four months to regularly monitor your credit report for errors, identity theft, black marks you may need to work on and other issues.
For your credit score it will cost you a nominal fee (it's worth it) paid to each of the three credit reporting agencies.
A credit score -- virtually always examined by lenders when you apply for a mortgage, credit card, car loan, other credit, even homeowners insurance and other financial accounts -- is a numerical rendition of your creditworthiness.
Scores range from about 300 to about 850. The higher the number the more likely you are to get credit and the more likely you are to get cheap credit. Your score should be at 760 or above to land the best interest rate, according to FICO, a leading credit scoring system provider.
Debunking the myths
To help debunk credit score myths, misunderstandings, misdirection and to stop financial behaviors that could be passed onto future generations, ING Direct and Experian developed five tips to help parents separate fact from fiction.
Practice what you preach. Simple financial behaviors such as paying your bills on time will keep your credit in good standing and will allow you to obtain better interest rates on big asset purchases like a house or car. Lead by example.
Start early. When you kids start to ask you to buy things for them, it's time for the "money talk." Later, introduce more complex credit topics with stern statements like "credit is not free money." Talk about interest rates, paying on time, paying off balances and saving money.
Make credit a family affair. Let children in on household financial discussions that reveal the true cost of necessities. Sit them at the table during budget and bill paying sessions. Explain the fallout from making poor financial decisions.
Set family financial goals. Teach children how money doesn't grow on trees. Show them how to save for things they desire rather than accessing credit to spend money they do not have. It's a way to encourage your children to set financial goals and work towards achieving them. Children savor things more when they put in the time and effort to purchase items with their hard earned cash.
Explain the difference. Talk to children about the differences between needs versus wants, especially at times when they want you to give into impulse buying. During grocery store visits, show kids the difference in prices between name brands and generic brands as a way to expand on this lesson.
Written by Broderick Perkins
The survey discovered more than half, 56 percent, of those surveyed thought bouncing a check or paying a fee for having non-sufficient funds in their bank account would reduce their credit scores.
Wrong.
Credit reports typically don't include information about checking and debit accounts, nor non-sufficient fund issues unless they somehow impact an attached credit account.
Also one in five (21 percent) thought checking their credit scores would hurt credit scores. Nearly as many (18 percent) thought accessing their credit report, would hurt their credit scores.
Wrong and wrong.
Obtaining your credit report and credit score has no bearing on your credit standing.
In fact, you should check your credit reports regularly. Every year, federal regulations allow you three free credit reports (ONLY through AnnualCreditReport.com), one each from the three credit reporting agencies, Equifax, Experian and TransUnion.
If you visit some other sound-alike, come-on web site, instead of AnnualCreditReport.com, expect to pay for credit services you may not need in exchange for that so-called "free" report.
From AnnualCreditReport.com, get the three free reports all at once if you haven't seen them for years. Otherwise get one from a different company every four months to regularly monitor your credit report for errors, identity theft, black marks you may need to work on and other issues.
For your credit score it will cost you a nominal fee (it's worth it) paid to each of the three credit reporting agencies.
A credit score -- virtually always examined by lenders when you apply for a mortgage, credit card, car loan, other credit, even homeowners insurance and other financial accounts -- is a numerical rendition of your creditworthiness.
Scores range from about 300 to about 850. The higher the number the more likely you are to get credit and the more likely you are to get cheap credit. Your score should be at 760 or above to land the best interest rate, according to FICO, a leading credit scoring system provider.
Debunking the myths
To help debunk credit score myths, misunderstandings, misdirection and to stop financial behaviors that could be passed onto future generations, ING Direct and Experian developed five tips to help parents separate fact from fiction.
Practice what you preach. Simple financial behaviors such as paying your bills on time will keep your credit in good standing and will allow you to obtain better interest rates on big asset purchases like a house or car. Lead by example.
Start early. When you kids start to ask you to buy things for them, it's time for the "money talk." Later, introduce more complex credit topics with stern statements like "credit is not free money." Talk about interest rates, paying on time, paying off balances and saving money.
Make credit a family affair. Let children in on household financial discussions that reveal the true cost of necessities. Sit them at the table during budget and bill paying sessions. Explain the fallout from making poor financial decisions.
Set family financial goals. Teach children how money doesn't grow on trees. Show them how to save for things they desire rather than accessing credit to spend money they do not have. It's a way to encourage your children to set financial goals and work towards achieving them. Children savor things more when they put in the time and effort to purchase items with their hard earned cash.
Explain the difference. Talk to children about the differences between needs versus wants, especially at times when they want you to give into impulse buying. During grocery store visits, show kids the difference in prices between name brands and generic brands as a way to expand on this lesson.
Written by Broderick Perkins
Monday, July 5, 2010
Transform Your Home With Home Staging
We know that dressing for success is important when it comes to establishing an image. Well, when it comes to selling your home, it's important to dress it up too. Staging homes has become increasingly more popular because it works.
I think of it like setting the stage for a theatrical production. The director wants everything on the set to have a specific place. Using a critical eye, the director makes sure that the set ambience (furniture, decorations, and even open space) is going to convey the exact feel she intends. That's what staging can do for your potential buyers - if done correctly.
Staging a home can allow buyers to understand how to best use the space in a particular room. It de-clutters a home. Think about those pictures of model homes … you never see all the electrical cord chaos in an office, right? Instead, you see a single computer (likely an Apple because they look cool) atop the desk. There might also be a big window offering plenty of natural light and that has an unobstructed view to the outside grassy hills. Nearby, a Feng Shui combination of flowing water, rocks, and glass in some sort of ornamental water fountain might sit on a countertop. A filing cabinet that isn't overstuffed with files takes up a small area of the room. And, yes, it's important that it really not be overflowing. Buyers will snoop around … in closets and cabinets. Anything that looks like it's been stuffed to capacity leaves an uneasy feeling for many buyers. But this look is streamlined. The emotional feeling conveys a non-verbal message of accomplishment, success, and an attitude that shouts, 'Wow! I can get a lot done here!' Bingo. That's good staging. And, perhaps, the very thing that causes a buyer to make an offer.
You can hire an expert to stage your home. Your real estate agent will likely also have many valuable tips. And you can also start to do some things on your own. It's often said, "You don't stage a home the way you live in a home." But, sometimes a staged home looks so good (if it's practical) you might want to keep your home that way. I have seen amazing changes from home stagers…sometimes you don't even recognize the home! Debra Gould of Six Elements, a home staging company, says that staging your home can increase the sale of your home by $10,000 to $70,000. She also points out on her Web site that "One of the side benefits of home staging is that it helps you see your house as a real estate listing instead of your home." This gives you the chance to really think about the sale of your home from a buyer's perspective. If you're selling your long-time home, it might have been a while since you shopped for a home. When we live in our homes, we begin to see them through a single lens. When home staging is completed it can give your home a completely new look, transforming it into a home that others can see as theirs.
There are typically a few major tasks to act on first when it comes to staging. They are:
1. De-clutter: I know we all accumulate lots of clutter and then get used to living with it. But really, clutter is a big distraction for buyers. Often they simply can't imagine what the home would look like without all that clutter. So, make it easy for them. Start with a clutter-free home when you list it for sale.
2. De-Personalize: do you want buyers spending more time looking at your personal photos or your home? Easy answer…so, put away the photos and trinkets. Besides, you're moving…you need to pack them up anyway.
3. Deep clean: don't leave dirty floors, carpets, windows, hallways, railings, or floorboards. It's just too easy to lose a buyer's interest due to something that really is such an easy fix.
4. Lighten and brighten: dark and mood lighting can be good for your creative ambiance but light and bright is best for showing the home.
5. Keep traditional rooms traditional. Gould writes on her Web site that she has seen hundreds of homes where the dining room is not used for its original purpose. While that might work for the homeowner, Gould explains that buyers need to see it as a dining room or else they might be inclined to think there isn't one.
Doing just these five tips will help improve the look and feel of your home and increase the chance of buyers seeing their belongings and their family in your home—and that means you may be closer to getting and offer and, ultimately, a sale.
Written by Phoebe Chongchua
I think of it like setting the stage for a theatrical production. The director wants everything on the set to have a specific place. Using a critical eye, the director makes sure that the set ambience (furniture, decorations, and even open space) is going to convey the exact feel she intends. That's what staging can do for your potential buyers - if done correctly.
Staging a home can allow buyers to understand how to best use the space in a particular room. It de-clutters a home. Think about those pictures of model homes … you never see all the electrical cord chaos in an office, right? Instead, you see a single computer (likely an Apple because they look cool) atop the desk. There might also be a big window offering plenty of natural light and that has an unobstructed view to the outside grassy hills. Nearby, a Feng Shui combination of flowing water, rocks, and glass in some sort of ornamental water fountain might sit on a countertop. A filing cabinet that isn't overstuffed with files takes up a small area of the room. And, yes, it's important that it really not be overflowing. Buyers will snoop around … in closets and cabinets. Anything that looks like it's been stuffed to capacity leaves an uneasy feeling for many buyers. But this look is streamlined. The emotional feeling conveys a non-verbal message of accomplishment, success, and an attitude that shouts, 'Wow! I can get a lot done here!' Bingo. That's good staging. And, perhaps, the very thing that causes a buyer to make an offer.
You can hire an expert to stage your home. Your real estate agent will likely also have many valuable tips. And you can also start to do some things on your own. It's often said, "You don't stage a home the way you live in a home." But, sometimes a staged home looks so good (if it's practical) you might want to keep your home that way. I have seen amazing changes from home stagers…sometimes you don't even recognize the home! Debra Gould of Six Elements, a home staging company, says that staging your home can increase the sale of your home by $10,000 to $70,000. She also points out on her Web site that "One of the side benefits of home staging is that it helps you see your house as a real estate listing instead of your home." This gives you the chance to really think about the sale of your home from a buyer's perspective. If you're selling your long-time home, it might have been a while since you shopped for a home. When we live in our homes, we begin to see them through a single lens. When home staging is completed it can give your home a completely new look, transforming it into a home that others can see as theirs.
There are typically a few major tasks to act on first when it comes to staging. They are:
1. De-clutter: I know we all accumulate lots of clutter and then get used to living with it. But really, clutter is a big distraction for buyers. Often they simply can't imagine what the home would look like without all that clutter. So, make it easy for them. Start with a clutter-free home when you list it for sale.
2. De-Personalize: do you want buyers spending more time looking at your personal photos or your home? Easy answer…so, put away the photos and trinkets. Besides, you're moving…you need to pack them up anyway.
3. Deep clean: don't leave dirty floors, carpets, windows, hallways, railings, or floorboards. It's just too easy to lose a buyer's interest due to something that really is such an easy fix.
4. Lighten and brighten: dark and mood lighting can be good for your creative ambiance but light and bright is best for showing the home.
5. Keep traditional rooms traditional. Gould writes on her Web site that she has seen hundreds of homes where the dining room is not used for its original purpose. While that might work for the homeowner, Gould explains that buyers need to see it as a dining room or else they might be inclined to think there isn't one.
Doing just these five tips will help improve the look and feel of your home and increase the chance of buyers seeing their belongings and their family in your home—and that means you may be closer to getting and offer and, ultimately, a sale.
Written by Phoebe Chongchua
Friday, July 2, 2010
Five Key Areas to Pay Attention to When Buying a Home
Looking for a new home can be exciting and frustrating. You can help alleviate the frustration by paying close attention to five key areas of the homes you're considering buying; it may save you money in the long run.
Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.
Electrical
Walker says sometimes homeowners assume with newer homes that all will work just fine but that's often not the case. "I inspected a brand new house—four years old but the electrical was all done incorrectly," says Walker.
Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you're browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.
Foundation
Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. "It was a model home. What the homeowners did was plant trees for shade to make it look really nice, but they planted the wrong trees and they're going to crack the foundation and it's going to cut the property value down by $50,000," says Walker.
Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. "As you walk through the house, 21 feet in and 30 feet deep, there's just too much root invasion and it's going to ruin their tile," explains Walker.
He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, "which means the foundation is moving."
However, just because you see cracks doesn't mean there is a foundation problem. "Most people don't understand that there are natural cracks in a house. That's why when we do an inspection report we have to look at it and say 'Okay, this is a typical crack and this one is an untypical crack,'" says Walker. He says some cracks may lead to other problems while others won't.
Plumbing
Walker says another big area of concern is the plumbing. It's an area that you can't always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. "Mold forms underneath sinks when people have a leak and they fix the pipe but they don't take care of the mold," says Walker.
He says things like caulking the sink can help prevent mold. "That's my number one thing I always find—bad sinks," says Walker.
He says that when you look at the sink, look behind it and most of the time you will discover a little crack. "What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it's in a perfect position to create mold," says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.
Attic
"You can tell everything about the house by the attic," says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. "In the attic you can tell where all the damage has been," says Walker.
"If you're in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced," says Walker. He adds, "You can tell if the roof is good because you can look right at the wood."
Landscaping
"There should not be moisture or plants next to your house," says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.
Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.
Written by Carla Davis
Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.
Electrical
Walker says sometimes homeowners assume with newer homes that all will work just fine but that's often not the case. "I inspected a brand new house—four years old but the electrical was all done incorrectly," says Walker.
Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you're browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.
Foundation
Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. "It was a model home. What the homeowners did was plant trees for shade to make it look really nice, but they planted the wrong trees and they're going to crack the foundation and it's going to cut the property value down by $50,000," says Walker.
Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. "As you walk through the house, 21 feet in and 30 feet deep, there's just too much root invasion and it's going to ruin their tile," explains Walker.
He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, "which means the foundation is moving."
However, just because you see cracks doesn't mean there is a foundation problem. "Most people don't understand that there are natural cracks in a house. That's why when we do an inspection report we have to look at it and say 'Okay, this is a typical crack and this one is an untypical crack,'" says Walker. He says some cracks may lead to other problems while others won't.
Plumbing
Walker says another big area of concern is the plumbing. It's an area that you can't always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. "Mold forms underneath sinks when people have a leak and they fix the pipe but they don't take care of the mold," says Walker.
He says things like caulking the sink can help prevent mold. "That's my number one thing I always find—bad sinks," says Walker.
He says that when you look at the sink, look behind it and most of the time you will discover a little crack. "What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it's in a perfect position to create mold," says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.
Attic
"You can tell everything about the house by the attic," says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. "In the attic you can tell where all the damage has been," says Walker.
"If you're in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced," says Walker. He adds, "You can tell if the roof is good because you can look right at the wood."
Landscaping
"There should not be moisture or plants next to your house," says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.
Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.
Written by Carla Davis
Thursday, July 1, 2010
How To Make Buyers Want Your Home
You love your home but when it comes time to sell, you have to share the love. In the other words, you have to make your home be seen in the eyes of potential buyers as their home. That can be tricky.
But if you do some of the basic things such as clearing clutter, creating light, bright, and open space, adding curb appeal, removing personal items (family photos, trinkets), fresh paint, and clean or new carpet -- you'll be on your way to attracting serious buyers.
Let's look at specific areas that create widespread appeal inside the home.
Here are some of the top areas to improve: countertops, flooring, built-in furniture, and old-style attached fixtures such as those big sheet mirrors in the bathroom. However, when making these improvements, there's one important consideration.
Functionality is the greatest concern cited by homeowners, according to the latest poll conducted by the National Association of the Remodeling Industry (NARI).
"The functionality of a home is very important, especially over the long term, as many homeowners in this economy have opted for remodeling over moving to new homes," says NARI National President Paul Zuch, CR, president of Capital Improvements.
So let's explore the areas I mentioned earlier and see how improving these items can lead to greater interest in your home. Countertops are fixtures in homes. So making sure that you select the best material to endure the daily wear and tear is important. If we're talking about the kitchen, for instance, there are many options: granite, tile, recycled glass (for a green option), solid steel, composite stone, butcher block, laminate, and even concrete. Yes, that last one sounds surprising but concrete is being used for countertops and laminate isn't necessarily trying to mimic other materials anymore. Instead, homeowners are embracing laminate's own unique high-tech look. The popular trend is a mixing of several styles creating a blended custom look for the kitchen. But in the end, functionality will rate highest for potential buyers. All of the countertop materials mentioned above have advantages and disadvantages when it comes to maintenance and usage; make sure you completely research the material before selecting it for your home.
Fixtures are an important area to improve. "People know a lot more about design," Laura Kirar from Larua Kirar-TRU Design told the Alexandria Times. These days, quirky, eclectic styles from international trends are becoming more prevalent in the United States. However, push the envelope too far with quirkiness and you just might lose a potential buyer. What's important to know is that buyers are paying attention to fixtures. If you have damaged or worn out faucets or lighting, it's best to replace them before showing your home. Also, replacing those big, nothing-special sheet mirrors with some framed mirrors can add a unique look without costing very much. While you don't want to have to spend a lot just before you sell your home, remember that these seemingly small items can have a great impact on improving buyers' interest in your home.
Flooring is a big interest for buyers. Wood floors are still very popular. Many Realtors say buyers are looking for hardwood floors. That's partly because they endure and don't go out of style. However, if they're damaged it can be a drawback because buyers may focus on how much work it will take and cost to do the repairs.
Built-in furniture can improve a home. Built-in bookcases and entertainment centers can save space and help make the room look larger. However, there's a downside. Built-in furniture isn't easily movable. So, potential buyers will have to really find the furniture useful and suitable for their needs. "It's all about personalization—homeowners want to know that their space can be converted easily into a different space in the future," Zuch said in a press statement by NARI. And that's what buyers want as well—the ability to make your home theirs when the sale closes.
Written by Phoebe Chongchua
But if you do some of the basic things such as clearing clutter, creating light, bright, and open space, adding curb appeal, removing personal items (family photos, trinkets), fresh paint, and clean or new carpet -- you'll be on your way to attracting serious buyers.
Let's look at specific areas that create widespread appeal inside the home.
Here are some of the top areas to improve: countertops, flooring, built-in furniture, and old-style attached fixtures such as those big sheet mirrors in the bathroom. However, when making these improvements, there's one important consideration.
Functionality is the greatest concern cited by homeowners, according to the latest poll conducted by the National Association of the Remodeling Industry (NARI).
"The functionality of a home is very important, especially over the long term, as many homeowners in this economy have opted for remodeling over moving to new homes," says NARI National President Paul Zuch, CR, president of Capital Improvements.
So let's explore the areas I mentioned earlier and see how improving these items can lead to greater interest in your home. Countertops are fixtures in homes. So making sure that you select the best material to endure the daily wear and tear is important. If we're talking about the kitchen, for instance, there are many options: granite, tile, recycled glass (for a green option), solid steel, composite stone, butcher block, laminate, and even concrete. Yes, that last one sounds surprising but concrete is being used for countertops and laminate isn't necessarily trying to mimic other materials anymore. Instead, homeowners are embracing laminate's own unique high-tech look. The popular trend is a mixing of several styles creating a blended custom look for the kitchen. But in the end, functionality will rate highest for potential buyers. All of the countertop materials mentioned above have advantages and disadvantages when it comes to maintenance and usage; make sure you completely research the material before selecting it for your home.
Fixtures are an important area to improve. "People know a lot more about design," Laura Kirar from Larua Kirar-TRU Design told the Alexandria Times. These days, quirky, eclectic styles from international trends are becoming more prevalent in the United States. However, push the envelope too far with quirkiness and you just might lose a potential buyer. What's important to know is that buyers are paying attention to fixtures. If you have damaged or worn out faucets or lighting, it's best to replace them before showing your home. Also, replacing those big, nothing-special sheet mirrors with some framed mirrors can add a unique look without costing very much. While you don't want to have to spend a lot just before you sell your home, remember that these seemingly small items can have a great impact on improving buyers' interest in your home.
Flooring is a big interest for buyers. Wood floors are still very popular. Many Realtors say buyers are looking for hardwood floors. That's partly because they endure and don't go out of style. However, if they're damaged it can be a drawback because buyers may focus on how much work it will take and cost to do the repairs.
Built-in furniture can improve a home. Built-in bookcases and entertainment centers can save space and help make the room look larger. However, there's a downside. Built-in furniture isn't easily movable. So, potential buyers will have to really find the furniture useful and suitable for their needs. "It's all about personalization—homeowners want to know that their space can be converted easily into a different space in the future," Zuch said in a press statement by NARI. And that's what buyers want as well—the ability to make your home theirs when the sale closes.
Written by Phoebe Chongchua
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