- Melissa Kellerman
Buying or selling a home can be a stressful experience without the security of a trusted REALTOR in your corner.
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I will guide you through every step of this rewarding process with professionalism and dedication. My attention to detail, strong communication and 100% effort will deliver the results you deserve. It is my mission to build lasting relationships and earn repeat referrals. The key to this is providing my clients with personalized service before, during and after every transaction. I am here to help you with all of your real estate needs.
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Friday, April 29, 2011
Colorado Springs is one of 10 cities and metropolitan areas nationwide
that are poised for an "early turnaround" in their housing markets,
according to a study released this week.
Realtor.com, an arm of the National Association of Realtors, included
the Springs in its first-ever listing of metro areas where market
conditions such as sales, prices and days on the market were analyzed.
"Definitely, Colorado Springs is one of the first towns in the nation
that we're seeing take the first steps toward recovery," said Julie
Reynolds, a Realtor.com vice president. "It's stabilizing. You're
signaling signs that a turnaround may be in progress."
However, it's unknown how long it will take before a full-fledged
recovery is under way, she added.
Realtor.com collected data from 146 metro areas around the country,
which includes about 930 multiple listing services that feature
properties listed for sale by real estate agents.
Some 20 key measurements - including prices, inventories and new
listings - were examined for March, and compared with the previous month
and March of last year. The data looked at single-family homes,
townhomes and condominiums.
Among positive indicators for the Springs:
* The median list price of homes for sale in Colorado Springs was
$224,900 in March, down 0.04 percent from the same month last year, but
up 1.53 percent from February. The city did better than the rest of the
nation, where the median list price of $199,500 in March declined 0.25
percent from a year ago and was up only 0.25 percent from February.
* The inventory of homes for sale in the Spring was 5,538 in March, a
4.51 percent year-over-year increase. Nationally, the inventory of 2.9
million homes for sale was up 9.75 percent in March over the same month
last year. Keeping inventories in check is a good thing, because too
many homes for sale can contribute to falling prices.
* The median number of days that properties were on the market before
selling was 113 in March, a 52.7 percent, year-over-year increase, but
down 11.02 percent from February. Nationally, the median number of days
on market was 160 in March, up 40.35 percent from a year earlier and
down only 2.44 percent from February.
The other nine cities and metro areas likely to see an early turnaround
in their housing markets, as analyzed by Realtor.com, were:
Buffalo-Niagra Falls, N.Y.; Los Angeles-Long Beach, Calif.; Fort
Myers-Cape Coral, Fla.; Dallas; Boston; Washington, D.C.; Colorado
Springs; Austin-San Marcos, Texas; San Diego; and Philadelphia.
Thursday, April 28, 2011
Keep your eyes peeled: Observing the neighborhood at various times of the day is a good way to get a feel for the overall safety of the neighborhood. Be sure to visit at night as well as during the day. Pay attention to things like noise, traffic and parking. Though these may not be the first things you would think about when visiting, they will be highly important to you should you decide to move there.
Research the local hospitals: How far away will your potential new home be from a hospital? Is that particular hospital well established? Conducting some online research about the hospital's reputation is a good idea as well, especially for families with ailing members.
Check up on the school system: For those with children or those who may have them in the future, the school system should be one of the top areas of concern when considering a move. School ratings can be viewed online, along with various forums of parental commentary. What are others saying about the town's teachers, education, after-school programs, etc.? If you can, ask others in your neighborhood about the schools. By doing so, you'll ensure that you are comfortable with where you will be placing your children.
There are many other aspects that would warrant research. Crime rates in the town or city are a large concern for many new homeowners. Visit the local parks both during the day and at night. How safe are they? What kinds of stores are in the neighborhood and do the store hours match your lifestyle? Will you need any sort of public transportation? Look into schedules for busses, trains or taxis, if necessary.
A successful move doesn't solely depend on the property you purchase. To increase your family's chances of successfully settling into your new home, research the neighborhoods and towns that the property is located in. The more you know, the better your transition will be.
Wednesday, April 27, 2011
The remodeler doesn't have a license and insurance. All professional remodelers should be insured and able to show their certificate proving such insurance. Although all states do not require licensing, remodelers in states requiring licenses should have it and be able to provide a copy.
The remodeler doesn't write contracts. Professional remodelers have clear contracts that outline the job, process, the cost, and helps clarify how problems will be managed. If you don't have a contract, neither the remodeler nor the homeowner is protected when something goes wrong.
The remodeler requires cash or payment in full before starting the job. Shady remodelers demand cash and then run with the money. Many homeowners have been stranded by paying in full up front.
He or she vastly underbids all other contractors. The company may have the best price, but that doesn't guarantee the best work. Such contractors may cut costs on quality for your remodel, which can end up costing more when the homeowner has to redo the work.
Customer references are not provided. Professional remodelers should have current references they can provide from current and past clients.
You have difficulty contacting the remodeler. Professionals have a physical office, mailing address, phone, and email. They should respond to your queries in a timely manner.
If you spot any of these red flags, you may want to exercise caution when making the decision to hire a remodeler. When in doubt, always seek referrals.
Newly deceptive scam artist tactics lure homeowners into misleading agreements. Their tactics include giving the false impression that they are affiliated with the government, charging illegal up-front fees and executing fraudulent lease-back, financing and repurchase schemes.
Highlights of the Know It. Avoid It. Report It. campaign include:
-Information on how to avoid becoming a victim
-Scam artist red flags and fraud warning signs
-Complaint form and hotline to report fraud or suspicious activity
-Resources for finding HUD-approved counselors and free housing workshops in every state
-Names of individuals and companies identified by law enforcement agencies who have allegedly committed loan modification fraud or foreclosure relief scams
Education, outreach and grassroots efforts in hardest hit communities include:
-Multilingual brochures, posters, flyers and other outreach materials
-Television, radio, print, mass transit and out-of-home advertising
-Social media activity
With millions of homeowners in foreclosure or at risk of losing their homes as they fall behind on mortgage payments, and eight million Americans expected to face foreclosure now through 2012, the timing of this campaign could not be more prudent.
HUD encourages homeowners to call 1-888-995-HOPE (4763) or visit www.hud.gov/preventloanscams to get the facts about fraud and to report suspected scammers.
For more information, visit http://www.hud.gov/
Monday, April 25, 2011
The following tips from the April 2011 Issue of HOLMES: The Magazine To Make It Right provides useful information that will keep homeowners from going over budget as they take on renovation projects this spring.
1. Work in the off-season. Some jobs like pouring concrete and applying stucco, are best done in good weather, but if your job doesn't require it, postpone it until the off-season to save on labor costs.
2. Avoid structural changes. Moving walls and adding foundations also raise the bill. If you must have more space, steal it instead of adding on; grab it from an adjoining closet or room, or even the hollow between studs.
3. Work with what you've got. Unless you're dealing with structural issues or water damage, it's likely that not everything needs to be replaced. If you've got a good set of cabinets, why trash the boxes when just replacing the cabinet doors will do?
4. Leave appliances, fixtures and outlets in the same locations. Running new lines drives up costs. Only when you've planned for such changes is it the right time to go to the trouble of rewiring and plumbing so that a range can sit where the fridge once stood.
5. Value-engineer. Your architect and contractor are trained to know all types of materials. Ask them to make recommendations for thrifty alternatives.
6. Buy all appliances or fixtures at one time and on sale, if you have a place to store them. Purchasing items in bulk can often garner you a discount from the retailer.
7. Stick with normal colors. By that we mean choose standard color wheel options or neutrals, which are manufactured in the greatest numbers, and the efficiency is passed on in the price.
8. Opt for factory finishing. Cabinets, floors and even entire houses are now available factory finished, allowing for faster installation.
9. Make decisions based on quality, not just price. It's still cheaper to have the same item over a longer period than to replace it a few years later-and pay for labor again, too.
10. Plan for energy efficiency. This can be as simple as buying energy efficient appliances that draw less energy over their operating lifetime, or installing a system to capture and amplify natural light, negating the need for an electric light in a windowless room. Investigate these options before you complete a contract.
11. Prioritize and don't budge. Once you have your list, refine it by dividing it between what you want and what you need. Ask yourself again why you are doing this project. Do you crave a more efficient space? An attractive and up-to-date room? Are you doing it for yourself or for resale? If the latter is the case, consult with your designer and a REALTOR to see where your money will count the most.
12. Go with the standard model whenever possible. There are low-cost alternatives to just about everything, and you don't have to compromise quality. This means weighing standard appliances versus commercial grade, stock versus custom cabinetry. Labor-intensive tile and woodwork can dramatically bump up cost. Talk to your builder about how to achieve a custom look for less.
13. Rule out thoughtless change orders. Nothing busts a budget faster than changing a floor plan or materials after work is underway. The time you invest in planning now will pay off as work gets underway. If you do run into any changes, minimize them. At this point, it will not only cost you money, it could also temporarily disband your construction team while you wait for new materials to arrive. And don't forget to request a copy of the change order from your contractor, detailing the new timeline and payment due date.
14. Use an architect, your paid advocate in directing the contractor and subs. And when you can't be on-site to stop waste and overspending or curb unauthorized changes, he or she can. The peace of mind is worth the money.
15. Have the architect itemize everything. Sounds tedious, but that's the thoroughness you are paying for. You'll want to see a detailed work scope document with sketches outlining the following: demolition, construction, plumbing, electrical, carpentry, tile and stone work and finished. "Itemize absolutely everything," says Collette Whitney of New York City. "This will give you an accurate basis from which contractors can bid, and from which you can compare bids." That includes specifications, which list every material thing going into the project, right down to the doorknobs. Don't forget to ask for a floor plan and elevations. "People tend to hear only 65-70% of any conversation," says Rory McCreesh, owner of a construction corporation in New York City. "You want to be sure you and your contractor completely understand the finished project. Detailed, comprehensive drawings give your contractor the tools to understand exactly what he needs to build for you." These drawings become the basis of your contract and the construction documents.
16. Seek multiple bids. Once you have the architect, pursue the best possible bids for the job. Have more than three licensed and insured contractors provide a detailed bid, including labor and materials, so you can really compare and analyze each. "When interviewing, you might want to ask the contractors about their worst experience and how they handled it," says Jason Yowell, owner of a design and construction company in Atlanta. "That'll give you insight as to how they handle adversity."
17. Itemize within the contract. Once you've picked your general contractor, he'll create a contract that includes a progress payment schedule. This is based on certain milestones of completed work, such as cabinet installation. It tells you how much money you have to pay and when, and what should happen when. Plus, realistically, snags do come up, no matter how well you organize and plan. Make sure the contractor includes at least a 10% cushion for the unexpected. Of course, review the contract in person with your architect and contractor, item by item, to make sure all are in agreement before singing.
18. Memorize the change order policy. Then try your hardest to avoid the need for any. You don't want them. But even we acknowledge they sometimes happen for legitimate reasons. In case you must make a change, make sure in advance that the contractor has a policy whereby he advises you of the cost and writes a change order immediately, which you then sign. Be informed of the procedure. Anything out of step with the contract at this point puts the project at risk.
19. Ask for pricing. You thought you did this when you went over specifications, right? But when you build anything, you have a minimum of 16 categories of pricing. "There's masonry work, millwork, cabinetry, framing, drywall, doors, windows, plaster, stone and tile, electrical audio and video," says Steve LeBlanc. "The more information the contractor gives you in terms of what something costs-and individual breakdown, item by item-the more likely you are to stay on budget."
20. You can benefit by purchasing materials through a professional. Architects and contractors have relationships with suppliers who offer purchasing efficiencies that save time. A big upside in using this service is that whoever orders the products also assumes responsibility if something goes wrong or is damaged or missing-not you. Any upcharge in materials takes into account the contractor's time, responsibility and experience; it's worth it.
21. Have all materials on-site before they're required. It's called the "preconstruction period" when everything gets ordered. This way no time is wasted-on your dime-while workers wait or miss a day because the materials they're working with have not arrived. The architect or contractor's project manager should be designated to monitor delivery times.
22. Hold pre-construction meetings. The people on your construction teams need to thoroughly understand the job prior to starting. Your contractor can see to this, possibly with a project or field manager, at this special meeting. You as the client won't attend; talks will be mostly technical. Prior to demolition, though, you should meet the crew. "Get together with your contractor's construction team to go over all aspects of the job, from introductions to phone numbers to a brief recap of the whole job," says Tom Sertich, president of a development company in Phoenix. "You, the client, may have further questions, such as scheduling, and they can all be addressed in person then by the team on-site."
23. Check materials as they arrive. Sounds obvious, but you must see everything out of the boxes to ensure things arrive undamaged and intact. Your contractor should review all materials as they arrive so the subcontractors aren't waiting for an indispensable item. This helps maintain productivity, too.
24. Let the pros do their jobs to avoid confusion. Ask questions if something concerns you, but don't get involved in the day-to-day management and give conflicting directions to subcontractors. This risks creating miscommunication. "The architect is your representative to the contractor and can walk through the site with you, get notes and then take that direction back to the contractor," says Dan D'Amelio. Since each knows the technical aspects of construction, they will speak the same language fluently. The architect can also approve the completion of each stage.
25. Prepare a punch list, or post-job list of to-do items you feel may still need attention. When the job appears done, it's customary to do a walk-through with the contractor or project manager and your architect. "Before the walk-through," says Yowell, "get some Post-its and use them to write notes for anything that concerns you, and then attach it to that item." Bring the punch list to the meeting.
26. Space out the payments. You should have been doing this throughout the project with the help of your written contract that includes an incremental pay schedule worked up beforehand. Now is the time to be ready with the final payment. This schedule is your insurance that the contractor will be with you until the end. Only when the project is completed-and any lien period has expired-and you are happily surveying a job well done, shake hands and hand over that check.
Thursday, April 21, 2011
If you're trying to sell your home, a run-down or messy house nearby can cost you some serious money. Here's what you can do about it.
Bad neighbors aren't just annoying. They can cost you real money when it's time to sell your home.
A nearby property's overgrown yard, peeling paint and clutter can easily knock 5% to 10% off the sale price of your home, said Joe Magdziarz, the president of the Appraisal Institute and a real-estate appraiser with 40 years of experience. A true disaster -- a junky home in deplorable condition and a yard packed with debris -- could cost you even more.
"In reality, there's so much supply right now that people are just going to pass," Magdziarz said. "It might make your home unmarketable."
Magdziarz has personal experience with how a bad neighbor can hurt a home seller's chances. A few years ago, he and his wife were house hunting and found a property they really liked -- until they looked next door.
He was a hoarder. There was junk all over the yard," Magdziarz said. "The last thing I want to see when I get home is a junkyard."
Even when real-estate markets were in better shape, messy neighbors caused problems. Kamie Dowen put her Harrisburg, Pa., home on the market five years ago but had problems selling because of a nearby property.
Toys littered the lawn, even in winter. The porch sported "a pumpkin that was two years past due," Dowen said. A garage door, damaged after the owner ran into it with his car, was never fixed.
"After I moved out and staged my home, it still took me over a year to get rid of it," Dowen said. "I had to sell it at my cost."
So what can you do?
Frustration can lead to guerrilla tactics. Jeanine Brydges Watt of Windsor, Ontario, got so fed up with her neighbors' yard that she waited until they went on vacation, then mowed the lawn and threw out the trash, which included old diapers and split-open bags of garbage.
Watt said she wasn't worried about being arrested for trespassing. The messy neighbors were renters and probably thought their landlord had done it, she said. And Watt's other neighbors were thrilled.
"If they had been asked, none of the other neighbors would have ratted me out," she said. "They were happy we cleaned up the eyesore."
You may not be willing to risk arrest, but there are other tactics you can try if a neighbor's property is hurting your home's value.
If your neighbor is elderly or disabled and simply not able to maintain her property, for example, you may be able to help her find free or low-cost services that can help. Habitat for Humanity's A Brush with Kindness program offers exterior painting, landscaping, weatherstripping and minor repairs to low-income homeowners who can't care for their homes because of age, disability or family circumstances.
Many local governments offer similar programs. Los Angeles, for example, provides free minor home repairs through its Handy Worker Program. Or you can check with the Eldercare Locator to find other resources for home maintenance in your area.
4 strategies for getting the mess cleaned up
If your neighbor is simply messy or indifferent, you might want to try these strategies:
Start with a conversation. If your neighbor is a drug dealer, owns dangerous dogs or is otherwise belligerent, you won't want to risk knocking on the door. Otherwise, approaching your neighbor in a friendly, low-key manner can be a good start.
The script could go something like this: "We're going to be putting our house on the market soon, and we really want it to show well. But we're afraid that people who don't know what nice neighbors you are might be a little put off by the condition of your yard right now. It's so hard to keep up with everything, isn't it? We'd be more than happy to help you tidy up a bit if you'd like."
Find the owner. If your sloppy neighbors are tenants and the direct approach doesn't work, or if the home is vacant, you'll want to track down the owner. A real-estate agent can help you, or you can visit your county property-tax assessor's office.
Then send a letter to the landlord or lender, complete with photos of the problem, and request action in getting the property cleaned up, says Ilyce Glink, the author of several books on real estate, including "Buy, Close, Move In!" If you get no response, consider giving the contact information to other fed-up neighbors and ask that they send letters as well.
"If a property has been foreclosed on, you can complain -- loudly -- to the lender to take care of the property. Go all the way to the top of the food chain, to the chief executive officer, and ask for assistance," Glink said. "You should also complain to your state mortgage regulator as well to the Office of the Comptroller of the Currency, if it is a big national bank."
Enlist help. If you have a homeowners association, make a formal request that it take action. If it's reluctant and you run out of other options, you can sue the homeowners association in small-claims court, Glink said.
Before you do that, however, try to enlist local government officials. Your city or county public-health department may be able to step in, particularly if trash or other unsanitary conditions are attracting vermin. The city or county building department should be notified of other obvious hazards, such as holes in a roof or a collapsing porch.
If you can't get local agencies to help, appeal to your elected representatives at the city or county level. Sometimes these folks can kick the bureaucracy into gear. A real-estate attorney can tell you if you can pursue a lawsuit against the neighbor, but typically these are expensive and can drag on for months if not years, making them impractical for most people trying to sell a home.
Practice mitigation. If your best efforts don't work, a privacy fence or tall hedge, if allowed, could help screen the problem. Otherwise, do what you can to make your own property shine and divert attention from the neighbor's mess.
Peter Anderson of Shakopee, Minn., who runs the Bible Money Matters blog, said he had a "fun time" selling a town house a few years ago because of neighbors across the street who had garbage in their driveway, a truck up on blocks "and a hundred wind chimes hanging from their garage."
"Despite that, it was a nice enough neighborhood," Anderson said, "and we finally were able to sell because we priced our home realistically, we staged our house to make it look like a model, painted, fixed up any problems and just made the home a very nice place to be."
Wednesday, April 20, 2011
Your home is only as secure as your locks. The most common type Check and repair your locks or add new ones.of forced-entry tends to be from damaging doors. Multiple deadbolts with one-inch throw bolts will keep your home safe and deter amateur burglars from the scene.
Examine the exterior of your home. Look for easy hiding places in your yard that burglars may try to make use of. Trim extremely large bushes or shrubs and remove overhanging branches that a burglar could use to get to an upper balcony or window. For extra security, add multiple motion-detecting lights around the yard to illuminate your property if a lurker attempts to enter. Try to think like a robber and use that mindset to strengthen your home's outdoor security.
Deal with the patio door. Sliding patio doors are also a common entry point for intruders. Place dowels in newer sliding doors to keep them from opening wide. Older doors with plastic bumpers are easy to knock off track. Reinforce them by adding flat-head screws far enough in to make up for the extra slack.
Don't leave packages outside for too long. Having any expensive electronics delivered to your house? Try to bring packages inside as soon as possible. Conversely, don't leave broken down cardboard boxes for these items outside for pickup. Doing so basically announces to everyone in passing that you just purchased an expensive item. Cut it up and bag it or dispose of it elsewhere.
In addition, keep in touch with neighbors regarding neighborhood safety. Starting a Neighborhood Watch is a great way to get everyone in your neighborhood on the same page. Report any suspicious activity to the police and trust your instinct. By keeping these things front of mind, you will hopefully keep your home and family safe and secure.
Source: Consumer Reports
Tuesday, April 19, 2011
By Leah L. Culler of MSN Real Estate
If you want to buy a latte or a novel, you find the one you want, hand over some money and go on your way, interacting with one or two people along the way. But if you're buying a house, the process — and the number of people involved — is exponentially more complicated.
It can be overwhelming to keep all of the players and processes straight. Who does what? Do you really need all of these people? Why can't you just do it all yourself?
"Without all those people, buying a house would take at least a year," says Ilona Bray, author of "Nolo's Essential Guide to Buying Your First Home." "You'd have to figure out all these things yourself, and it's a complex thing."
Each of the people involved in the homebuying process is an expert in that particular step. Just like a sports team, each player has a role and ability that helps the team come together to get the job done.
Here's a look at all the players and why — or if — they are essential to the process.
Most agents are found through word of mouth: A friend or neighbor had a good experience and passed along the name to you. You'll want to interview prospective agents to find out whether they specialize in the neighborhoods or property types you are looking for, whether they can answer your questions and whether you feel comfortable with them.
You should also check an agent's license by visiting the website of the Association of Real Estate License Law Officials. Many agents are also members of the National Association of Realtors and have the Realtor designation, which means they comply with NAR's ethics code and standards of practice.
Michael Wolf, a San Diego-area agent and author of "The First Time Homebuyer Book," says an agent should be a local expert who understands the nuances of location. Agents can tell you if homes north of a certain street are better than homes south of it, for instance.
After helping you find the right home, your agent will manage the process of putting in an offer and negotiating the sale. The agent should explain the steps of the process from the beginning and keep in constant communication with you.
So, is an agent necessary? Considering that a buyers agent usually doesn't cost a cent, it doesn't make much sense to go without one, Wolf and Bray say. A buyers agent makes a commission that the seller pays, though this sometimes is worked into the final sale price.
"Compared to what you give up in negotiating power, a good agent can earn back their commission and then some by finding ways to talk the price down, etc.," Bray says.
Wolf says a buyer may not know which reports are necessary, which inspections to get, whom to contact, how to rank and address problems that come up, and whether something is a deal-breaker. An agent who spends every day entrenched in the homebuying process will be familiar with these things.
Mortgage broker or lender
The financing aspect of your home purchase may begin before you find an agent with a loan pre-approval. But the real work with a mortgage broker or lender starts once you've found a home and want to buy it.
A mortgage broker's job is to shop around to find you the best loan and lender to fit your needs.
You can go straight to a lender for a loan, but you're going to need to do a lot of research on your own.
"For the number-crunchers, that might be a way they're happy to spend their time, figuring out all the various comparisons to be made," Bray says. "But it seems like the average human being isn't excited to be doing that."
If you do go straight to a lender, you may interact with one person or several. A loan officer or mortgage banker will help you pick a product from the lender's offerings and help you apply but may have assistants during the approval process.
Before you can get a loan, the bank will have an appraiser look at the home and decide if it's really worth the money you're planning to spend. Many homeowners hire their own appraisers to make sure they're getting the best value.
"With so much supply in the market, if a home is overpriced, people are going to bypass that and go on to other homes," says Joseph C. Magdziarz, president of the Appraisal Institute.
Magdziarz says an appraiser is an unbiased third party who can actually tell you the truth.
"He has no vested interest in a sale or purchase and can give you a reasonable and reliable opinion of the value," he says.
An appraiser isn't actually determining the exact value of the home but is mirroring the market using comparable sales and listings. An appraiser answers the question: What can people buy if they don't buy my home?
If someone is buying a home with cash, an appraisal isn't required, but Magdziarz says it's not something you'd want to skip.
"For the amount of money spent in the deal, the appraisal is probably the least costly but most important tool you can have in making that decision," he says. "It pays to be well-informed."
Before you buy a home, you should have it inspected to understand its condition.
A home inspector will evaluate all major systems and components of the home, documenting and explaining anything that is unsafe, inoperative or damaged, says Steven Richer, owner of Primo Home Inspections in Farmingdale, N.Y.
"The inspection can provide peace of mind, or the issues found can be reasons to not buy the house, ask for a reduction in price, (ask) for a monetary credit, (ask) that repairs be made prior to purchase, or to budget the repairs needed," Richer says.
Wolf says a home inspector is the "first line of defense in terms of your knowledge base for the property you're going to buy."
In addition to the general home inspection, there are dozens of specialized inspections. A lender may require a pest inspection before you can get a loan. But you can also hire specialists to inspect the home's foundation, roof, electrical system, sewage system or chimney, for example. General home inspectors may recommend one of these detailed inspections based on something they find.
Richer says some buyers will skip the inspection if a home is new, recently renovated or appears to be in good shape. But he says that this can be dangerous because of all the hidden problems an inspection may uncover.
And Bray says the inspection report is a great baseline for a homebuyer to have. It may tell you that the roof will need replacing in five years, for instance.
"It's nice to get a written guide to what the systems in your house are that need watching and what to look back at," she says.
A closing agent is a neutral third party who is in charge of all the details of your home-purchase agreement. This person also is called an escrow agent, escrow officer, closing officer or title agent. Depending on the state in which you are buying a home, this person will likely work for a title or escrow company.
This is a detail person who focuses on whether the money is where it should be and whether the deal is going to happen when it should, Bray says.
A closing agent is part of the entire transaction but becomes a major player toward the end of the process. This person is "absolutely vital and important," Wolf says.
Here are a few of the details a closing agent will handle:
Perform a title search and arrange for title insurance.
Coordinate with your lender and the seller's lender to make sure the money transfer is completed.
Establish an escrow account for any deposit you make; this will be transferred to the seller when the deal closes.
Record the deed that transfers the property to you.
In addition to the five major players in your home purchase, you may need the help of some of these people, depending on your state and your transaction:
Real-estate attorney: In some states, real-estate attorneys are a standard part of the process and draw up the purchase contract. But you may want to use one even if it's not required where you live. If there is any legal issue, such as claims against the property, problems with the title or a co-ownership issue, hire an attorney. And if you're buying a home in a development that has a homeowners association, an attorney can help you wade through the covenants, conditions and restrictions that will govern your community.
Tax professional: In her book, Bray says a buyer may want to consult an accountant or another tax pro to learn how to take advantage of the tax benefits of buying a home.
Insurance agent: Don't forget that you'll need homeowners insurance. Bray says she advises buyers to shop around and figure out which company will offer the best coverage, based on their needs. It's also important to look for an agency that has good customer service. If everyone in your area is facing disaster all at once, such as after Hurricane Katrina, how easy will it be to file a claim?
You'll also interact with a notary during the closing process and representatives from utility companies as you set utilities. If you are remodeling or renovating your new home, you may hire a contractor.
The total number of people you have contact with will vary. First-time buyer Andrew Martin, who bought a house late last year with Wolf's help, interacted with at least 15 — four from the loan company alone.
The key to a smooth homebuying process is to understand who does what and to pick the right person for each job. Do your research and interview anyone you may want to hire.
Thursday, April 14, 2011
Raising your deductible might be the easiest bet. Homeowners can shave off as much as 25% of the premium by raising deductibles from $500 to $1,000. For those who only file claims in the case of a large emergency, a higher deductible may be worth the savings. Owners of older homes might want to avoid this option. Examine your situation to determine if this is a smart choice for you.
Making home improvements is also a great way to lower costs. Do you need a new roof? Would your home benefit from an updated heating or plumbing system? Even safety features like alarm systems can help you save in the long run. Fencing pools and trampolines (or even getting rid of them all together) lowers your claims risks in the eyes of your insurance company and these efforts will be rewarded in savings. Once your home improvements are completed, be sure to let your insurance company know immediately. You may be able to save up to 15%.
As with most financial endeavors, keeping your credit score high will help your case. Many companies use these scores to determine rates based on consumers' credit history. Granted, this isn't the only factor in determining your insurance premium, but good credit still goes a long way toward keeping insurance costs down.
Multipolicy deals should never be overlooked. By combining your homeowners insurance with your auto or life insurance, you may be eligible for another 5-15% of savings, which really adds up compared to buying insurance from all separate companies. Look into combining your policies and do some comparison shopping. You may be surprised at the numbers.
There are many ways homeowners can save money on their homeowners insurance. Be sure to review your policy regularly to ensure that it is up to date and accurate, and crunch those numbers wherever you can. By combining many of the suggestions above, you can save quite a bit of money while still protecting your home.
Sources: Bankrate, National Association of Insurance Commissioners
Wednesday, April 13, 2011
"Attracting qualified buyers to the market and reducing the inventory of vacant homes remains essential to stabilizing neighborhoods and helping the market recover," says Terry Edwards, executive vice president of Credit Portfolio Management. "Since interest rates remain low, the incentive will go a long way toward helping even more families buy a new home so this is a great time for Fannie Mae to offer some assistance."
All Fannie Mae-owned HomePath properties are listed on HomePath.com and most listings include detailed property descriptions, photographs, community and school information, and more. In addition, many Fannie Mae-owned properties are eligible for special HomePath Mortgage and HomePath Renovation Mortgage financing, which offers homebuyers an opportunity to purchase with as little as 3% down.
For more information, visit: http://www.fanniemae.com/.
As the cold temperatures become a distant memory, and the spring selling season gains momentum, consumers have come to agree on one thing-now's a good time to get off the fence and into the real estate market. This is the overall theme in the latest American Express Spending and Saving Tracker survey, a monthly survey that tracks the spending and saving habits of consumers in order to get an indication of what's happening in the market. "This month's Spending and Saving Tracker provided an up-to-date look at various consumer trends and gave us the opportunity to assess how consumers are feeling about the current market in addition to gauging homeowner confidence," says Leah Gerstner, vice president of public affairs at American Express.
"This month's survey points to the fact that consumers overwhelmingly feel that we are in the midst of a buyer's market," she adds. The data also points to the fact that a seller's market is at least a year away, which is certainly positive news. While homeowners aren't necessarily willing to settle for less than the asking price when selling their home, two of the biggest areas of interest in the latest survey deal with homeowners including home improvement projects on their to-do list, as well as the willingness to include concessions to get their home sold.
"In looking at the results of our latest Spending and Saving Tracker survey, our thinking was that if consumers overwhelmingly view today's market as a buyer's market-which they do-they are likely to have plans to put more money into their home," adds Gerstner. In fact, the survey found that about 64% of homeowners currently have home improvement projects on their to-do list for 2011.
While the plans are in place, however, the amount that homeowners are budgeting to spend has gone down quite a bit from last year. "Homeowners are looking for better ways to stretch their dollars, and many are looking toward energy-efficient home improvements that will pay off in the long run." The survey shows that among homeowners who are looking to go green, the most common items homeowners would spend their money on include energy-efficient windows and doors, insulation, roofing, heating and cooling systems as well as alternative energy systems.
Another finding that stood out in the latest survey had to do with whether or not sellers were willing to make concessions to get their homes sold, especially in today's market. While 44% of sellers were willing to give away appliances during a sale-the biggest concession among young professionals and affluent homeowners-another 28% said they would take care of requested repairs in order to get their home sold. "While a large majority of sellers are willing to make concessions to get their home off the market, the willingness to make concessions is down among young professionals when compared with the 2010 survey," says Gerstner. "This is an important finding as it shows that young professionals are more confident in their ability to sell their homes today."
"Homeowner confidence in today's market has increased compared to last year," says Gerstner. "In fact, the survey shows that the confidence level is pretty evenly split-42% of homeowners are confident they will get their asking price in today's market, while 47% of homeowners aren't that confident." Even though home values continue to be on the low side, young professionals and affluent homeowners are seemingly more confident in today's market.
Monday, April 11, 2011
"Many families are feeling a financial squeeze these days and the tax benefits associated with owning a home can be a welcome relief," says Mike Sibilia, president of Santa Clara County Association of REALTORS . "There are many benefits to being a homeowner, but some of the most substantial advantages are most apparent at tax time."
Tax credits and deductions for homeowners include the mortgage interest deduction, capital gains on home sales, and credits for certain energy-efficient home improvements. The MID allows homeowners to deduct the interest paid on a mortgage debt of up to $1 million on a primary residence and one additional residence.
"Some suggest that many of today's tax incentives for homeowners primarily benefit the wealthy, but that is untrue," says Sibilia. "Ninety-one percent of homeowners who claim the MID earn less than $200,000 a year."
Federal law also allows sellers to exclude certain capital gains from the sale of a principal residence. Couples who file a joint federal return can exclude from taxation up to $500,000 of any gain in their home's value. Singles can exclude gains of up to $250,000.
There are countless tax benefits available to homeowners who have recently installed energy-efficient improvements, as well. The American Recovery and Reinvestment Act of 2009 created energy tax credits for installing insulation, energy-efficient exterior windows or doors, heat pumps, furnaces, central air conditioners, or water pumps. A 30% credit is also available to homeowners who installed alternative energy equipment such as fuel cells, solar water heaters, solar electric equipment, small wind energy projects, or geothermal heat pumps.
"For people who don't have hundreds of thousands of dollars in savings to buy a home outright, these tax benefits can help them begin building their future through homeownership," says Sibilia. "REALTORS continue to work tirelessly to defend these tax benefits on Capitol Hill and ensure public policies that promote responsible, sustainable homeownership."
30-year fixed-rate mortgage (FRM) averaged 4.87% with an average 0.7 point for the week ending April 7, 2011, up from last week when it averaged 4.86%. Last year at this time, the 30-year FRM averaged 5.21%.
15-year FRM this week averaged 4.10% with an average 0.7 point, up from last week when it averaged 4.09%. A year ago at this time, the 15-year FRM averaged 4.52%.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.72% this week, with an average 0.6 point, up from last week when it averaged 3.70%. A year ago, the 5-year ARM averaged 4.25%.
1-year Treasury-indexed ARM averaged 3.22% this week with an average 0.7 point, down from last week when it averaged 3.26%. At this time last year, the 1-year ARM averaged 4.14%.
"Mortgage rates were little changed after an encouraging employment report from the Bureau of Labor Statistics," says Frank Nothaft, vice president and chief economist of Freddie Mac. "The economy added 216,000 jobs in March and the unemployment rate fell for the fifth consecutive month to 8.8% marking the lowest rate in two years. Additionally, the private sector has gained 560,000 workers in the first quarter of this year, which represents the largest quarterly increase since the first quarter of 2006."
For more information, visit http://www.freddiemac.com/pmms/data.html and http://www.freddiemac.com/pmms/weightings/weightings_series_010.html.
Friday, April 8, 2011
"It's not about timing the market. It's about time in the market," says Steve Berkowitz, chief executive officer at Move, Inc. "Once you know how long you expect to own a home, look at the historical value performance of properties in the neighborhood. Be confident about your own job security, down payment resources and tolerance for upkeep, as well as the lifestyle you want today and in the near term. While homeownership may not be for everyone, it is the right choice for hundreds of thousands of people. Today's housing market, especially for first-time buyers, makes it almost impossible not to think about the possibilities."
To help first-time buyers know if the time is right for them, here is a "reality checklist" designed to help them decide if the time is right:
Get Your Financial House in Order
Before you decide to buy a home, it's essential to make sure your credit is in good shape and repair any damage previously done. Know your credit score: 35% of successful buyers recently reported they didn't know their credit score when they went house shopping, according to a national survey fielded for MortgageMatch.com. Having enough money set aside for a down payment is a key component to making sure you are ready to purchase a home. Also, it's important to not put all of your money in the down payment as other fees or unexpected expenses often arise after closing.
Don't Fall in Love with a House You Can't Buy
Find out how much you can afford. Establishing your purchase power upfront, including how much money will be required for a down payment and closing costs, is a must for first-time buyers. Look for special loans available from FHA and government sponsored loans for first-time home buyers that reduce the amount of money required to get into a home.
Learn the Lingo
Since first-time buyers are new to the market and will finance a significant portion of their purchase, it's important to get familiar with the processes and terminology associated with home buying. Here are a few key terms to add to your vocabulary:
Bait Rate: Misleading mortgages with low rate promises and no contingencies generally for those with extraordinary credit. Rates are based on: credit, debt-to-income and loan-to-value ratios, the size and type of loan, property location, and the day you lock your rate, etc. The loan isn't locked until the application is accepted. By then, it may be too late to find a better rate from another lender.
Closing Costs: The fees required to process and close your loan. They're a cash obligation running from three to five percent of the purchase price. Motivated sellers might pay a portion of these costs.
FHA: Federal Housing Administration, the Federal Government Agency that oversees the US Housing market. FHA Loans are loans insured by the Dept. of Housing and Urban Development.
FRM and ARM: A Fixed Rate Mortgage Loan (FRM) is a loan where your interest rate stays the same for the life of the loan. ARMs are Adjustable Rate Mortgages with variable interest rates that fluctuate based on an agreed-upon index.
GFE: The Good Faith Estimate (GFE) is a document explaining all costs involved in getting a loan.
TIL: The Federal Truth-in-Lending Form is a document that spells out the costs and fees of the loan.
Per Diem Interest: Interest you pay per day, from the day you close to the last day of the month.
Underwriting and Underwriting Fees: Underwriting is a process the lender performs to qualify a borrower for a loan and the fee is what you pay the lender at closing to cover evaluating the risk involved with loaning you money.
Warranty Deed: A legal document guaranteeing the seller has a right to sell a property, which is very important if you are considering a distressed or discounted property.
Mortgage Mumbo Jumbo Translated Into Knowledge and Power
While national rates on 30-year-fixed-rates mortgages have risen slightly this year, they are still at historic lows not seen since 1980, according to Freddie Mac.
"Buyers who prepare themselves financially before they start looking for a home will have a better chance of succeeding," says Sue Stewart, senior vice president for Move, Inc. "If you want to land the best mortgage that fits your needs, start early, educate yourself on your financial situation, get your documentation together and find a lender you trust."
If Now Isn't the Right Time, Prepare for Your Future Purchase
If now isn't the right time for you to buy a home, make a plan with a target date for when you expect to be ready. Improving your credit, paying down debt, stabilizing your work history, and calculating exactly how much you can afford, are the best ways to prepare for your future home purchase. It's also important to refrain from making any new large purchases or applying for new credit.
Monday, April 4, 2011
As we spring forward into the traditional homebuying season, there are plenty of bargains to be had, thanks to continued low interest rates and sliding prices. But do you have enough in your account to handle closing costs? We'll look at who pays for what at closing and how buyers can manage these costs.
We'll also ask experts to take the temperature of the market, and show you how to do your own real-estate research before taking the big homebuying plunge.
Who pays for what?
You know where you want to live, you've saved up a nice down payment, you're pre-approved for a loan and you're inching ever closer to finding the right house.
But how much do you know about the purchase transaction itself? There's more than just price to consider, says Adam Brett, a real-estate agent in Fullerton, Calif. There are a slew of fees to pay, plus taxes, insurance and inspections.
What's your home worth?
"The sellers typically pay for the majority of closing costs," Brett says. But it can vary widely depending on the region and the seller. And in today's buyers market, many are subject to negotiation.
Here's a general breakdown of what buyers and sellers are expected to pay:
Title insurance, to assure the lender that the property has a free and clear title.
Home inspection and any other inspections such as chimney, roofing or geological.
Fire-insurance premium for the first year.
Recording fees and notary fees for documents.
Termite inspection and remediation of infestation or damage.
City and county transfer fees.
Title insurance, to assure buyer of free and clear title.
Homeowners association transfer fees and any unpaid balance.
Any bonds, assessments or tax liens.
The tab for closing costs can vary widely, from about 1% of the purchase price to 3% for Federal Housing Administration loans that require a mortgage-insurance premium and additional lender fees.
Many buyers are now asking sellers to help cover these steeper FHA fees, in essence lowering the purchase price of the home, Brett says.
"They are playing hardball with the attitude that 'I am here to get you [the seller] out of trouble,'" Brett says. Indeed, he says, he has even seen some buyers ask for six months of seller-paid property taxes.
There's not as much room for expense negotiation with bank-owned properties. In fact, most don't provide a home warranty, and many don't cover termite work, Brett says. Of course, the tradeoff is that these homes are often priced at a discount to traditional listings.
A great time to buy?
Just when you thought the market's slide was over — it's not. After six consecutive months of decline, prices in the 20 markets comprising S&P/Case-Shiller Home Price Composite Index edged down an additional 3.1% in January, compared with the same month a year earlier.
In fact, 11 cities, including Atlanta, Detroit and Chicago, posted new post-bubble lows, making that oft-talked-about double-dip price recession a reality.
"There's still not enough demand relative to supply," says Maureen Maitland, S&P Indexes vice president. "The homebuyer tax credit just masked the extent of the recession for a while."
The only cities posting a year-over-year increase were San Diego, at 0.1%, and Washington, D.C., with a healthy 3.6% growth rate.
So should homebuyers wait on the sidelines a bit longer? Not necessarily, Maitland says.
Although prices in most areas are expected to remain weak for the foreseeable future, no one, she says, is expecting significant further price drops, especially because prices in the 20-city index are already down 31.8% from their peak in the summer of 2006.
The latest home-sales data
The news was even more erratic in February: The National Association of Realtors says existing-home sales dropped 2.8% from February 2010 and 9.6% from January, a number that many in the industry think is overstated.
Its February Pending Home Sales Index, which measures home contracts, not closings, ticked up 2% from January, enough to make NAR chief economist Lawrence Yun almost cheery.
'Listed': Pending home sales rose in February, but not by much
"We may not see notable gains in existing-home sales in the near term, but they're expected to rise 5% to 10% this year, with the economic recovery, job creation and excellent affordability conditions providing confidence to buyers who've been on the sidelines," Yun said in a statement.
What do you think? Are you as optimistic as he is? Is it a good time to buy?
Make an 'educated' homebuying decision
Want to learn more about how healthy your market is? Homebuyers can tap into a number of free resources to find out more about their local economy, home prices and the surrounding rental market – all factors that will affect the value of their investment.
"These (resources) can help answer such questions as, 'Should I rent or buy?' 'Has the market hit bottom?' 'How much value has my local market gained or lost?' and, 'Is there a high potential for future home price declines?'" says Ingo Winzer, president of forecasting firm Local Market Monitor.
Here are a few Web resources that LMM uses to make its home-price predictions and a little instruction on how to pull this information from these often-bewildering government sites. Use them to draw your own conclusions about when and where to buy.
Job growth: Halfway down the page you will find "Employment, Hours and Earnings — State and Metro Area." Click on "One-Screen Data Search," select your state and metro area, then select total nonfarm and all employees.
Home prices: Near the top of the page, click on the drop-down menu for "House Price Index," then "Downloadable Data." The "All Transactions Index" for metro areas shows quarterly pricing information for local markets.
Unemployment: Near the bottom of the page is "Unemployment." Find "Local Area Unemployment Statistics" and click on the "One Screen Data Search."
Income growth: Click on "Interactive Tables" then on table "CA1-3." Select "Per Capita Personal Income " and "Metropolitan Statistical Area."
Vacancy rates: Look at tables Nos. 4 and 5 for rental and homeowner vacancy rates in about 75 metros across the country.
And don't forget, the number of foreclosures will play a big role in how your market does in the next several years. Data firm RealtyTrac provides free quarterly information on foreclosure rates in more than 200 U.S. cities.
Home Warranties Protect Homeowners during Extreme Weather; Attract Buyers in Competitive Real Estate Market
A home warranty provider with 1.4 million customers said it responded to nearly three million service requests in 2010, approximately half related to HVAC malfunctions. The company received increased calls from homeowners in areas of the country, such as the Northeast, that experienced extreme summer heat-stressing AC systems-and record cold and icing during winter-stressing heating systems.
Meanwhile, with an abundance of homes for sale, sellers and buyers are reaping benefits from home warranties.
"For the past 28 years, I have encouraged home sellers and listing agents to add a home warranty during the listing cycle to protect sellers against unexpected repair expenses if a system or appliance malfunctions after the home goes on the market," says Dominic Cardone, a real estate broker in the suburbs of Philadelphia. "Perhaps even more importantly, the home warranty can help keep together a transaction by easily and inexpensively resolving many of the issues sometimes discovered during the home-inspection stage."
According to many home warranty providers, the highest rate of homeowner claims encompasses water heaters, furnaces and central-air conditioning, while major appliances covered by a home warranty generally start to require servicing at five years of age. Since home systems and large or built-in appliances are acquired during a home sale, there are many unknowns--such as how things previously have been used and maintained.
"A home warranty offers immediate financial protection for new homeowners, who generally purchase a new home without working knowledge of the age or functionality of its infrastructure and equipment," says Timothy J. Meenan, executive director, Service Contract Industry Council (SCIC). "The repair and replacement coverage of a home warranty is cost effective and provides peace of mind, particularly during the first years of ownership if the inherited, unfamiliar home systems and appliances malfunction."
Home warranties can be purchased anytime during homeownership, renew annually, and most are transferable with the sale of a home. They provide 24-7 phone support and access to pre-qualified repair professionals, a particularly useful benefit for owners new to a neighborhood or region.
For more information, visit http://www.go-scic.com/.