Home Inspections Can Save You Money In The Long-Run

Home Inspections Can Save You Money In The Long-Run

If you’re hiring someone to inspect the home you want to buy, or you’re a seller trying to find out if there are any hidden problems that need fixing before you put your home on the market, here are five things you need to know:

1. You can choose your home inspector.

Your real estate professional can recommend an inspector, or you can find one on your own. Members of the National Association of Home Inspectors, Inc. (NAHI), must complete an approved home inspector training program, demonstrate experience and competence as a home inspector, complete a written exam, and adhere to the NAHI Standards of Practice and Code of Ethics.

2. Home inspections are intended to point out adverse conditions, not cosmetic flaws.

You should attend the inspection and follow the inspector throughout the inspection so you can learn what’s important and what’s not. No house is perfect and an inspection on any home is bound to uncover faults. A home inspector will point out conditions that need repair and/or potential safety-related concerns relating to the home. They won’t comment on cosmetic items if they don’t impair the integrity of the home. They also do not do destructive testing.

3. Home inspection reports include only the basics.

A home inspector considers hundreds of items during an average inspection. The home inspection should include the home’s exterior, steps, porches, decks, chimneys, roof, windows, and doors. Inside, they will look at attics, electrical components, plumbing, central heating and air conditioning, basement/crawlspaces, and garages.

They report on the working order of items such as faucets to see if they leak, or garage doors to see if they close properly. Inspectors may point out termite damage and suggest that you get a separate pest inspection. The final written report should be concise and easy to understand.

4. Home inspectors work for the party who is paying the fee.

The NAHI Standards of Practice and Code of Ethics clearly state that members act as an unbiased third party to the real estate transaction and “will discharge the Inspector’s duties with integrity and fidelity to the client.” A reputable home inspector will not conduct a home inspection or prepare a home inspection report if his or her fee is contingent on untruthful conclusions.

The inspector should maintain client confidentiality and keep all report findings private, unless required by court order. That means it is your choice whether or not to share the report with others. If you’re a seller, you don’t have to disclose the report to buyers, but you must disclose any failure in the systems or integrity of your home.

5. Inspectors are not responsible for the condition of the home.

Inspectors don’t go behind walls or under flooring, so it’s possible that a serious problem can be overlooked. Keep in mind that inspectors are not party to the sales transaction, so if you buy a home where an expensive problem surfaces after the sale, you won’t be able to make the inspector liable or get the inspector to pay for the damage. In fact, you may not be entitled to any compensation beyond the cost of the inspection.

As a buyer, you need the home inspection to decide if the home is in condition that you can tolerate. You can use the report to show the seller the need for a certain repair or negotiate a better price. You can also take the report to a contractor and use it to make repairs or to remodel a section of the home.

One thing you should not do when buying a home is skip having the home inspected because of cost or undue pressure by the seller. A home inspection is reasonable, it can save you money in the long run, and it’s required by many lenders, particularly for FHA loans. There’s a reason why buyers should beware, and a home inspection gives you the information you need to make a sound buying decision.

Source: Buying tips

Six Surprising Retirement Trends You Need To Know

Six Surprising Retirement Trends You Need To Know

Tiny homes. Rockin’ communities where Jimmy Buffet is your spirit animal. Rockin’ a strenuous hike minutes from home. Yeah, this is not your Grandfather’s retirement.

Long gone are the days when people packed it in and moved to a nice, calm little home for the aging in Florida the day they turn 65. Not only are people working longer today, but they are looking for more out of their retirement – more fun and excitement, more job opportunities, and more opportunity to hang out with family. If you’re getting ready to retire, these are the trends you’ll want to know about.

Lifestyle-oriented communities

And we’re not just talking about weekly bingo. There is a wave of new retirement communities, most notably Jimmy Buffet’s foray into a new career path, that cater to a much more active lifestyle. “It’s easy to chuckle at news that a Margaritaville retirement community is coming to Florida (what better age for Parrotheads to pursue their day-drinking dreams?),” said Curbed. “But the billion-dollar community offers more of what today’s and tomorrow’s seniors really want: active, engaging, and walkable neighborhoods. Latitude Margaritaville Daytona Beach has nine models open, with new homes priced from the $200,000s; the Hilton Head, SC location is in its first phase with prices from the mid $200,000s.


aarp.org

Other developments, like the new $100 million-plus Rancho Mission Viejo in Orange County, CA is being developed “as an upscale mixed-generation development, with housing catering to older adults integrated into clusters of neighborhoods,” they said. “Developments like New York’s new community center for the Morningside Retirement & Health Services (MRHS) showcase a renewed focus on active, communal space. A cohousing development for seniors on Oakland’s waterfront called Phoenix Commons has been compared to a ‘dorm for grownups.'”

Retiring…but not all the way

Mid-size and larger cities are becoming havens for retirees because, among other positive attributes, they offer thriving job markets. So why would that be important to someone who is getting ready to stop working? Because, increasingly, retirees aren’t retiring all the way. Or, they’re embarking on secondary careers, often part-time, post retirement. “74% of working Americans plan to work past retirement age, with 11% expecting to work full time and 63% expecting to work part-time,” said The Street.

Chasing happiness

U.S. New & World Report’s 2018 list of the Best Places to Retire compared the top 100 metros for their potential as retirement spots, using data including housing affordability, taxes, and access to healthcare facilities. Their overall desirability and average levels of happiness were also key to the rankings. “Several cities in Texas made the top 10,” while “three cities in the mid-Atlantic region are highly rated.” You can see the entire list here.

Multi-generational living

Multi-generational living is on one of real estate’s fastest-growing trend. “In 1940, about one-quarter of the U.S. population lived with three or more generations in one home. After WWII, American families largely became two-generational, with parents and minor-age children under one roof,” said Forbes. “The percentage of households with multiple generations started declining to 21%, reaching a low of 12% by 1980.” According to Pew Research Center data, 60.6 million people, or 19 percent of the U.S. population, lived in multigenerational homes, including 26.9 million three-generation households.”

In fact, the trend is so pervasive today that builders are increasingly creating highly livable granny flats and tiny homes that can live on family land or in backyards. They’re also building new construction homes like Lennar’s Next Gen, which is billed as a “home within a home” and includes “all the features you’d expect in a separate unit (a kitchenette, single car garage and full bathroom) while giving you the freedom to pop in whenever you’d like,” they said.

Increasing the activity level

“The choice of recreational activities is gradually shifting as the baby boomer generation heads into retirement,” said U.S. News & World Report. “A recent study by the Physical Activity Council revealed some interesting findings. Activities that are increasing in popularity include camping, bicycling, hiking and canoeing. Activities that are decreasing in popularity include golf, swimming for fitness and working out using machines or weights.”

The AARP found that boomers are increasingly migrating to states “with mild climates and recreational options. “A newly released survey indicates that those who do move increasingly choose mountain and western states where they find a desirable combination of affordable housing, mild weather and outdoor recreational opportunities, such as skiing and hiking,” they said. United Van Lines’ National Movers Study found that the Mountain West region – which stretches from Arizona to Wyoming – attracted the “biggest influx of older people, with 24.5 percent of those moving citing retirement as a reason for relocating.” That represents a strong shift from several decades ago “when older people mostly left northern states and headed southward. ‘We’re seeing retirees being attracted to more outdoor adventure destinations than in the past.”

Following family

Another of today’s top trends has retirees moving closer to family. For many grandparents, moving toward their children and grandchildren is “the last chance to focus on family and to leave a legacy of special memories,” says Christine Crosby, editorial director of Grandmagazine,” to Kiplinger.

Source: Buying tips

The Legal Ties That Bind With Your Down Payment

The Legal Ties That Bind With Your Down Payment

Question: We are both in our upper sixties and retired. Last October, we put money down on a condominium apartment that is to be completed around September of this year. We put down ten percent of the price in cash and the money is earning a modest amount of interest until settlement. We have some savings, but the balance would be paid in cash from the proceeds of the sale of our present home.

Although we believe the price of the condominium has gone up slightly since we signed the contract, we now have serious thoughts about apartment living and about putting most of our resources into this transaction because of some new and serious health concerns.

Is there any way we can cancel our agreement and not lose the down payment?

Answer: The lawyer in me says that a contract is a legally binding document that must be upheld. The humanitarian in me suggests that, at the very least, you should try to get out of the contract, especially with the facts you have described.

First, review the terms of the contract very carefully to determine your rights and responsibilities. Are there any contingencies in that contract, such as your ability to obtain financing or the necessity to sell your house? If any of these contingencies legitimately cannot be met, it is possible you have the legal right to declare the contract null and void.

Next, determine whether the contract can be assigned. Although most developer contracts are not assignable, it may very well be that you have the right to sell your contract to someone else. And even if you do not have that right, it never hurts to ask the developer.

For example, if the contract is for $100,000 and the market value now is $110,000, if you have the right to assign that contract, you may find someone who would purchase your contract for the contract price — or even a few thousand dollars above the contract price.

The person who buys your contract would be obligated to follow through on all of the terms of your contract. In effect, the buyer would be stepping into your shoes, assuming all the rights and responsibilities you presently have.

As I have indicated, although most developer contracts do not permit such assignment, it is worth looking at this aspect of your contract.

Next, do not hesitate to discuss this matter with both the real estate firm representing the seller and try to speak directly with the seller. Explain your situation. They may be sympathetic. If the market for your condominium is anticipated to be strong, the seller-developer may be able to make more money by reselling the property to someone else.

Finally, you may want to consider buying the property and then trying to sell it yourself. Unfortunately, this is risky because there never is any guarantee you will find a buyer quickly and the duplicate settlement costs, financing charges and other settlement-related matters may not make the dual sale worthwhile.

You may also have to pay a real estate commission for that second sale. Realize that until the developer has sold most, if not all of the condominium units, you are competing against the house. And as we know, the dealer always wins.

You indicated you have put down a deposit of ten percent and you do not want to lose the money. However, there are times when a buyer would prefer to walk away from a transaction, lose the money and avoid subsequent aggravation.

Peace of mind sometimes cannot be measured in terms of dollars and cents. Although I cannot recommend forfeiting your deposit, if this is an option you are willing to consider, make sure you discuss the situation with the seller before deciding. Sign a release and have the seller sign it also. You want to make sure that, if you forfeit the deposit, the seller can not sue you for damages. This will be spelled out in the sales contract.

Basically, if a buyer defaults on a real estate contract, the seller has three options available:

  • Suing for specific performance, in effect, asking the court to require you go ahead with the transaction.
  • Suing for damages if there are substantial monetary damages involved as a result of your failure to live up to your part of the contract. For example, if the seller has to resell the property at a lower price than your contract price, this would be the measure of damages.
  • Electing to retain the deposit as the only remedy. Remember, if you decide to forfeit, make sure the seller agrees, in writing, that the only remedy will be the forfeiture of the deposit. This may also be spelled out in the form contract you signed.

Although I recognize that conditions often change and new circumstances often arise after a contract is entered into, it must be pointed out that, in most cases, the time to decide whether you want to purchase property is before you sign a contract.

After your signature is on the contract and you have given some money down as a deposit, you are legally bound to comply with all the terms and conditions of that document. Your fate basically depends on how the developer reacts to your situation.

Source: Buying tips

Home Buying Checklist: What Else Does ‘Location’ Mean?

Home Buying Checklist: What Else Does 'Location' Mean?

“Location, location, location” are the cornerstones of property value and neighborhood popularity. Evaluating this seemingly-simple, triple-impact factor goes beyond merely checking out the street address.

Yes, proximity to the places you and family members regularly must or want to visit is an important factor in identifying an ideal location. However, there’s more to accessing location than an address.

LOCATION CHECKLIST

Below is a comprehensive checklist of LOCATION FACTORS many of which may be overlooked by buyers until they move in and discover that their chosen and paid-for location is not all they expected it to be. Many of these factors also affect market value, now and in the future. All these factors will not be an issue for every property. Check off the factors are relevant to your home buying.

Walkability has many definitions which largely differ by walking purpose: destination-driven, exercising, socializing, exploring, enjoying the outdoors…. Measures of walkability can be useful and may add to market value, but these scores are not absolute, so investigate the reference source and measurement approach. Experiment by walking where you and family members would walk and when. There may be obstacles, like very busy streets, that would affect whether walking would be the best transportation choice.

Nearby Shopping used to be a big location factor, but online shopping has taken the shine off this convenience for many buyers. In some areas, malls are falling into disrepair and closing. Would that be a concern for you? In other locations, new large-scale commercial ventures are underway in or closer to residential areas. How would you feel about having a big box store on your doorstep?

Developments especially large-scale projects, condominium towers, multiple-housing complexes, and commercial ventures, increase density, traffic, noise, and  pressure on schools and community services. Years of planning and arguing proceed ground breaking, so today’s quiet streets may reveal little sign of what will begin once you move in. Ask a lot of questions about local development.

Street Status exists in most neighborhoods, which themselves each carry different status. Certain streets confer status on residents. Which street, side of the street, or end of the street carries greater real estate value or status? One end of the street may be closer to shopping and the other to parks. What do you value regarding physical location?

Sunshine is valued by most buyers, even though they may appreciate it for different reasons, ranging from gardening to solar energy. In some areas, south-facing backyards are more popular and, in others, it’s south-facing fronts. What is blocking sunlight to the property now and what might block it in the future?

Teardowns or properties more valued as building sites than homes, exist in most established neighborhoods. How many teardowns surround the real estate? Teardowns are not all dilapidated

structures. In many areas, attractive bungalows and two-storeys are demolished to build mega-homes, perhaps like the one you are interested in. During the demolition and build, neighbors are plagued by noise, dust, lack of parking, and inconsideration that can mean restricted use of their own properties for a year or two. What’s planned around the property?

  Neighbors may include Airbnb hosts and other home-based business owners, some of whom may conduct their ventures in ways that end up disturbing neighbors. Many municipalities and police receive complaints from homeowners concerned about what businesses are doing around their property.

  Schools particularly popular ones, can be a big influence on a location decision for those with children to educate.

  Transportation carries different importance for different buyers. Have public transit and road systems kept pace with rising population in the area? Are neighborhood-changing transportation projects like rapid transit scheduled to begin in the next year or so? Will the bulk of related construction stress fall near this property?

  Infrastructure is an often-overlooked factor. How recently have bridges and main roads, essential for access to the area and downtown, been up-dated and up-graded? Have water and sewage

services been upgraded to serve growing populations? Or, will you face months, if not years, of “under construction” streets around your home?

  Break-ins tend to be more common in some areas than others. Who keeps the neighborhood safe? What’s their track record? Do most neighbors have their own home security system? Are community safety groups active?

  Water Supply and shortages can be an issue. Droughts seem more common and last longer. How prepared is the community to handle water shortage? Do summer shortages affect lawn watering and landscaping, making local drought-resistant plants and no-grass front yards essential? Are bush fires a recurring threat?

  Flooding in low-lying areas and drainage basins can be a threat. Could rising water plague that real estate or the immediate area or access? How affordable and attainable is property

flood insurance in this area? When was the last time flooding was an issue and what happened during clean up? If the property is waterfront, is shore erosion or rising water an issue? Is the waterfront often fouled with dead algae or other smelly matter?

  Traffic is more of a concern in urban areas. Is the residential area under traffic calming and speed-management strategies to reduce rush-hour traffic through the area? If there are speed bumps, how are fire and emergency vehicles affected? Is there a plan to add or remove traffic calming and why?

  Airplanes can disrupt family life even if a property is not close to an airport. The increase in frequency of planes taking off and landing at all hours has many neighborhoods, even those distant from airports, plagued by airplane noise. Circling a city to land, means planes travel over many homes drowning out conversations and disrupting sleep. Just popping in for an open house or viewing may not make you aware of a noisy flight-path problem.

  Landscaping and mature trees enhance neighborhoods. Large trees can present hazards as they age. Are trees downed in storms replaced? What invader species are working their way through the area to undermine outdoor enjoyment?

  History of the home or location may be a concern in special cases. Has anything happened on the property or near it that has led locals to consider the real estate less favorably?

  Pollution — air, noise, or water —is a problem in some areas? What is being done to reduce the ill-effects for residents?

  Taxes are a key location-driven affordability factor. All of the above can impact how quickly property taxes and municipal fees go up. What’s the pattern of increase in the area? How does local government raise the funds it needs to maintain quality of life in the area?

Don’t panic. All these factors will not affect every property.

Our point is that buyers should find out which, if any, of these issues could significantly affect their new home, its market value, and their life at that location before they buy.

  • Concentrating too heavily on interior decor and not on relevant listed issues above, may leave buyers vulnerable to unpleasant realities after moving in.
  • What could buyers do about surprises like those listed above after they move in?
  • Would issues like these affect what buyers are prepared to pay for that real estate in the first place?

Who can possibly know all these details about a property?

  • The property owner, or at least the smart ones, keep up on what is going on at or near their location because all of this affects property value and enjoyment.
  • Neighors know a lot —maybe more than sellers realize.
  • Local real estate professionals know this and more because local knowledge and market value are what their work centers on. Listing professionals spend time with sellers to explore the history of the property and the area. Between them they know what’s going on locally and how that property will be affected.
  • The local real estate professional or buyer’s agent who assists you in finding the right real estate for your needs and budget has access to the owner’s knowledge and that of the listing professional through the Multiple Listing Service. This plus their own local knowledge should help you understand the listed factors relative to the real estate you are considering.
Source: Buying tips

Eight Signs It's Time To Move Up

Eight Signs It's Time To Move Up

The starter home. It was so cute and quaint and sweet when you bought it, right? But, that was before kids and dogs and overnight quests and holiday dinners that require mathematician-level logistics to finding everyone a seat in a dining room that bursts at six people.

Let’s face it: It’s probably time to move up. Lack of space is the No. 1 reason people start looking for a larger home. Families expand, lifestyles change, and the sheer accumulation of stuff can make a small home feel even tighter. “More than a third of all homebuyers last year were families with kids,” said Dave Ramsey. “And 37% of sellers age 36 and under cited cramped quarters as their reason for moving.”

But running out of room not the only reason to consider moving up.

You’ve got the equity

You may have had to scrimp and save for the down payment on your first home, but, if your home has appreciated, you may be in a completely different financial position this time around. If you’re the type who envisions paying off your home and being free and clear, moving up may not be on your mind. But, for the rest of us, having equity in our current home means greater buying power to buy something bigger or get into a neighborhood we covet.

You’re at each other’s throats

Feeling cramped and living in clutter and hating that you don’t have a space of your own or even a minute to yourself? That can create stress and leave you feeling anxious and overwhelmed. And, it goes against the general principle of homeownership since your home is supposed to be your sanctuary! Having some extra room to spread out and yard for the kids and dogs to play in can make a real difference in the way your family functions.

Ask yourself if “your quality of life is suffering,” said Unpakt. “This category can include many things: your ever-growing pack of dogs or cats who are driving you crazy. Your cascading piles of fabrics that you use for quilting, but just can’t keep organized in your current space. The lack of a guest room means that when family visits, you’re stuck on the couch. Whatever it might be, if your quality of life has taken a nosedive because your house is too small, well, the answer is pretty clear.” 

The neighborhood is changing…and not for the better

One of the reasons you may want to start looking at a new house is because your neighborhood is starting to evolve. Maybe there are new restaurants and bars that have attracted a different crowd or plans for a huge mixed-use project that, while great for the economic potential in the area, could mean more traffic than you want in your quiet little town. Even something like a change in the flight patterns from the local airport can get you thinking about that next home.

Remodeling is price prohibitive

A good real estate agent should be able to give you an idea of what necessary (or wanted) renovations would cost to your existing home. It could be that the amount of work you would need to do on your home to get it where you want it – or get it into tip-top shape for a sale – is beyond what you want to spend. In that case, it might make better financial sense to make small improvements, put it up for sale, and put your money into a new home that better suits your needs.

You don’t want to over-improve for the neighborhood

The other important factor to consider when deciding whether to move or improve your home is how the redone home would sit in your neighborhood. You don’t want to run the risk of doing a bunch of expensive renovations only to have the home sit on the market because it’s overdone and considered overpriced.

“Weighing against renovation is the risk you’ll ‘over-improve’ your home compared with others on the block,” said Bankrate. “When you are in a neighborhood that has starter homes and smaller homes, adding a large addition or doing an extensive renovation may not yield the return one would expect.”

Everyone else has moved on

So, your kids were young and bicycles and basketball nets lined the street when you first fell in love with your home. At the time, it was everything you were looking for. But now, so many of those families have moved on, and the lively street you loved has turned rather sleepy. If you’re still holding on to the memories of what your neighborhood once was, maybe it’s time to find one that better meets your lifestyle needs today.

You’ve crunched the numbers

Presumably, a move-up home is going to be more expensive. Beyond the equity you can use to make the purchase doable, you have to consider the monthly expenses, too. “It’s not just the sticker price on the house; it’s the long-term costs associated with it,” said Realtor.com. “When you go up (in square footage), you get higher property taxes, higher utilities, and more maintenance.” And acquiring more rooms means shelling out for more furniture, too.

You can make sure you can afford a move-up home without becoming “house poor” by “using online affordability calculators to figure out how far you can stretch your dollar.

Source: Buying tips

Would You Buy A Home From Kanye West?

Would You Buy A Home From Kanye West?

Among the controversial rapper/artist/fashion designer/pop culture phenom’s recent flurry of eyebrow-raising tweets comes this gem: So would you buy a home from Kanye West? You might soon be able to.

The announcement of Yeezy Home was met with a lot of “Huh?” and “What?” and “Why?!” but also a fair amount of “Hmmm” and “Wow” and “More info, please.” So…not unlike almost everything else Kanye West does. And that’s especially true of his most recent behavior.

He has courted controversy on Twitter yet again with his take about slavery…namely that it was a choice. The post-tweet backlash was swift as people quickly came out to condemn the idea. Huffington Post said he was “schooled on history” and one longtime fan spoke for many with his emotional letter to Kanye, which was printed by Variety, explaining why he was putting the artist’s music “on pause” because of the pain his words have inflicted. Kanye also supposedly lost nine million followers in the immediate aftermath, although Twitter says that was “a glitch.”

Either way, he still has his fans, his followers, and, certainly, his apologists, and he may soon have a team of architects and industrial designers working with/for him and, presumably, buyers who love the idea of a Kanye-created home.


people.com

Why architecture?

But, who are they? And, why architecture? For now, we can more easily answer the second question.

“West first mentioned his interest in pursuing architecture and design in a 2013 interview with the BBC, said Architectural Digest. “‘I want to do product, I am a product person,’ he said. ‘Not just clothing but water bottle design, architecture…I make music but I shouldn’t be limited to once place of creativity.’ He went on to explain that he was working with ‘five architects at a time’ to figure out exactly what he wanted. Later that year, he spoke to students at Harvard University’s Graduate School of Design, telling students, ‘I really do believe that the world can be saved through design, and everything needs to actually be architected…I believe that utopia is actually possible – but we’re led by the least noble, the least dignified, the least tasteful, the dumbest, and the most political.”

That Kanye arrogance is nothing new; some might say it’s even part of his charm. And, he does have an eye. His footwear and apparel brand, Yeezy, will reach $1 billion this year—this according to another tweet from Kanye during this most recent blitz. And, while that number is being disputed, the success of the line remains impressive. (It’s also worth noting that, “The Yeezy brand, which sells apparel and sneakers created in collaboration with Adidas, is facing a backlash online with customers threatening to burn or sell their Yeezy sneakers and celebrities including Rihanna and Drake reportedly have stopped following West on Twitter,” according to Business Insider.)


people.com

Who are the potential buyers?

Which brings us back to the “Who are they?” question. With so much emotion tied up in the homebuying purchase, anyway, does a home associated with such a polarizing figure crate a barrier right out of the gate? Perhaps not for fans, if they can even afford it. Kanye has expensive taste – his Hidden Hills, CA home with wife Kim Kardashian is said to be worth $60 million, and, although another one of his recent tweets said that the clothing line would be “working with the most genius-level talents and creating product at an affordable price,” ArchDaily countered that, “Given the current three-figure price of West’s product line, the tweets are a difficult knot to untie.”

Style file

So, while not much detail is known at this point about Yeezy Home, one can presume, given his taste in homes, that price points could reach sky-high levels. Which would leave many a fan on the outside.

Kanye and Kim’s home is gorgeous, if you like minimalism, all-white spaces, and an almost “cathedral-like quality. “The couple worked with renowned Belgian architect Axel Vervoordt, whose clients include Robert DeNiro and Calvin Klein, to transform the property,” said People. The publication also noted that, “West was nominated for a prestigious design award in 2017 for his fashion line, Yeezy, and even pitched a furniture collaboration to IKEA in 2016, though so far nothing has come of the proposition.”

His love or brutalism could also offer stylistic clues and design inspiration for Yeezy Home. “West also seems to have a penchant for Brutalism – the heavy-handed, much-contested architectural style that architects love to defend,” said Curbed. “A feature on PIN-UP recently offered an look inside the Yeezy studio, an all-concrete-everything kind of space in a ’70s office building in Calabasas, California. And let’s not forget his $110,000 Le Corbusier concrete lamp, which he once called his ‘greatest inspiration.'”

Source: Buying tips

The Tenants' Opportunity To Purchase Act Is Dead: Yes and No

The Tenants' Opportunity To Purchase Act Is Dead: Yes and No

TOPA — the tenants’ opportunity to purchase act — was enacted over 30 years ago by the Council of the District of Columbia. It was designed to protect tenants from being kicked out of their homes by landlords who wanted to make more money selling the property.

Over the years, depending on who you were, TOPA was either hated or loved. Tenants called it “tenant capitalism”; landlords blasted it as “pure blackmail”.

Why? Especially with single family homes, (including condos and coops), when a tenant received a TOPA notice that their landlord had a contract offer to buy, they would demand lots of money in order to release their TOPA rights.

All of this came to a head when the Council, on April 10, 2018, enacted a bill that to a large extent, eliminated TOPA from single family dwellings. The Council relied, in part, on a study that from October 26, 2009 through August 15, 2015, there were approximately only 19 successful TOPA sales to tenants, out of 398 TOPA offers to single family residents. In other words, although landlords fully complied with the TOPA laws and provided the necessary forms , less than 5 percent of those tenants actually ended up buying their home. The law is awaiting the Mayor’s signature and then will have to wait out the 30 day period of congressional review before it becomes final.

Oversimplified, the new law abolished TOPA as it applies to single family dwellings, which includes a condominium or cooperative apartment. If you own a house with a basement that has a kitchen and bath facilities separate from the main dwelling house, and may even have a separate entrance, that is referred to as an “accessory dwelling”. Even if there are tenants in both units, and this becomes law, it will be exempt from TOPA.

However, even though the landlord no longer has to issue the TOPA notice — which had to be in English and Spanish, and copied to the Office of the Mayor — the tenants still have to be given notice of a proposed offer. That notice also has to be provided to the DC Office of Tenant Advocate.

To complicate this even further, there are different requirements where certain tenants are elderly or have a disability. If such a tenant signed a lease to occupy a single family accommodation by December 31, 2017, and physically took occupancy by January 15, 2018, then a modified TOPA still exists. Such tenants must respond with 20 days after receiving the notice expressing interest in buying. Then that tenant has at least 25 additional days to negotiate a sales contract, and closing must take place at least 45 days thereafter. However, once again, if a lender needs more time, the tenant can have an additional 30 days in which to get lender approval and then take title. A tenant who is 62 years or older is considered elderly.

The Council was sensitive to the concerns of the real estate industry — and many home owners — that tenants were flipping (assigning) their rights to speculators for large sums of money and also delaying closing. The new law is very clear: the only consideration an elderly or disabled tenant can receive for selling its tenant rights is the “right to immediately use and occupy the tenant’s unit for a period of 12 months following the sale and at the same rent charged at the date of the offer”.

However, there are three different TOPA requirements. One is (or was) for single family properties; another was for properties with 2-4 units, and a third was for apartment buildings with 5 or more units.

The latter two remain alive and kicking. Tenants in those properties still have rights to purchase their property, although if you live in an over 5 unit complex, only a formal tenant association can speak and act for the tenants. There are different time frames in which the tenants (or their association) have to respond. For example, if you live in a two-four unit building, all tenants must respond expressing an interest in buying. However, if not everyone is interested, or if 15 days have elapsed since getting the TOPA notice from the owner, any one tenant can send in such a notice, which must be within 7 days thereafter.

The tenant (or tenants) have 90 days to negotiate a contract to buy, and if such a contract is entered into, the buyer has at least another 90 days in which to go to closing. However, if a lending institution gives the tenants a notice in writing that it needs more time. the settlement can be extended for another 30 day.

If you think that’s complicated, let’s look at the over 5 unit complex. Here, once all of the tenants get a TOPA notice, they have 45 days in which to form a tenant organization with the legal capacity to hold property. They then have 120 days to enter into a contract, and another 120 days to take title. Once again, if a lender needs more time, the landlord must extend the time in accordance with the lender’s estimate of how long it needs.

Since its enactment, TOPA has been the subject of literally hundreds of lawsuits, some brought by landlords and others by tenants. I suspect that litigation will continue regarding the 2-4 and the over 5 unit requirements; only time will tell how the new law will fare regarding single family properties.

Source: Buying tips

The Dangers Of Love At First Sight When Buying A Home

The Dangers Of Love At First Sight When Buying A Home

Facebook just announced they are getting into the dating app game, giving those who are looking for love yet another avenue to potentially find it. While we don’t yet now specific details of how it will work, one thing is for sure: There are bound to be a lot of matches made based solely (or at least mainly) on looks, alone. Is this a smart strategy? It all depends on what you’re looking for. And the same could be said of your home search. If you’re just looking for a pretty face, it’s easy to fall in “love” – with a person, or a home. But you need to look deeper if you want it to last.

The kitchen makes your stomach do that roller coaster thing and the master bath is so pretty it should be on the cover of How to Seduce a Homebuyer magazine. It’s hard to ignore the pretty stuff when you’re home shopping. The trick is not getting distracted by the pretty stuff and ignoring the important stuff. You can take yourself out of the house hookup land and help avoid falling for the wrong home by asking yourself these questions during your home search.

Is it a keeper?

If you’re looking for a long-term relationship with your home, you should have some non-negotiables. Perhaps you would never consider marrying someone who was rude to service people or didn’t share your political views. When it comes to your forever home (or at least your “for the foreseeable future home”), making a list of absolute must-haves can help you stay on track. They’ll probably include location, price, and home size, but getting even more specific (perhaps you need to be in a certain school district but are willing to compromise on the type of architecture) is even better.

Is there any substance behind your emotional attachment

You walk into a restaurant to meet your date, and before you even sit down, you’re a goner. Is it the eyes, the smell? Some cosmic thing at work? Love at first sight? Who knows.

You walk into a house that seems like nothing special, and before you’re even passed through the hallway, you’re a goner. What’s at play here? Is it some reminder of a home from your childhood, maybe? Who knows. But now you’ve got it bad, and you have to have that house. Time to get real with yourself, because falling for a person – or a home – and going on emotions alone typically doesn’t end well.

“Buying a home is a very emotional process, but if you allow those emotions to get the best of you, you may fall prey to a number of common home buyer mistakes,” said Investopedia. “Since buying a home has many far-reaching implications – ranging from where you will live to how hard it will be to make ends meet – it’s important to keep your emotions in check and make the most rational decision possible.”

Is it too much of a project?

We’ve all heard of the project person – you know, a guy or girl that could be great with just a little (or more than a little) work. A project house could be even more alluring. Seriously, who doesn’t love the idea of a fixer-upper these days? But, you need to know your limits, says Bob Vila.

“Don’t overestimate your abilities. Determine if the house you like needs work,” they said. “Then assess whether you’re really capable of doing it.” It’s also a good idea to properly estimate the post-renovation potential with help from your real estate agent. “Make sure that if you can’t do the work, you get estimates before you buy the house so you know what you’re getting into. If the cost of the house plus the renovations will put the home’s value significantly above others in the neighborhood, it’s probably not the best investment – or you may need to scale back the renovations.”

What are its friends like?

You can tell a lot about someone by their friends, and the same is true of homes. If the home you’re looking at is fixed up and well-taken-care-of, but the rest of the neighborhood is eh, that could be reason to walk away. “Before making an offer on that picture-perfect home, take a look at the surrounding houses. If they’re all in disrepair – or just obviously less nice than the one you’re considering – you might be buying the most expensive house in the neighborhood,” said Realtor.com. Their three reasons include: 1) “When it comes time to sell, unloading the priciest home on the block will be a challenge. 2 ) A home is an investment – and the best investments have the most room for improvement. Ideally, you’ll be adding to the home during your ownership, building equity in hopes of a payoff when you (eventually) sell. 3) You can’t bet on the neighborhood to improve.”

What are they not telling you?

Yes, there are seller disclosures, but they’re only going to tell you so much. Have you checked out the neighborhood in terms of crime statistics, sexual offenders nearby, and any big plans for the neighborhood or surrounding area that could affect your home value or lifestyle? Just like you might Google someone you meet on Tinder (Come on, we all do it!), do the same with any home you are considering.

Are they dating someone else?

It’s human nature to want someone who is wanted by someone else. Seeing a lot of interest in a particular home may affect you similarly, and you may find yourself pressing for a home because it’s in high demand. Are you just trying to “win,” or do you really want the house?

Conversely, a home that’s seemingly unpopular because it’s been on the market for a while can have the opposite effect on us. Don’t let a good one get away just because it hasn’t already been snapped up by someone else. In either case, refer to your list of must-haves to remind yourself of those things that are really important to you before making a move.

Does it have good character?

This is obviously important when looking for a relationship partner. But, to many people, it’s also an important factor when buying a home. You can get waylaid by a great figure or physique just like you can a huge backyard or a gourmet kitchen and ignore something that was key on your must-have list. As it relates to your home, you can always add crown molding or vintage fixtures. But new construction may never have the feel of an older home, if that’s what you’re into.

Source: Buying tips

Can IRA Assets Be Used To Purchase Real Estate?

Can IRA Assets Be Used To Purchase Real Estate?

Question: We are interested in buying investment property? Currently, our IRA is not producing the income we would like. Can we use some of our IRA assets to purchase real estate? – Anna

Anna: The simple answer is yes, but its complicated and full of risks. This column can only touch on the surface; if you remain serious, you must talk with an attorney and a qualified financial adviser.

The typical real estate investor can get lots of tax benefits, such as deductions for property taxes, mortgage interest as well as the ability to depreciate the property on your annual tax return. However, if your IRA owns the investment property, you cannot take advantage of any such tax benefits. In fact, it is even more complicated, if you are over age 70 1/2 and have to start taking the required minimum distributions (RMD).

Since the annual calculation is based on the balance of your IRA at the end of each year, you actually have to get your investment appraised, so as to plug that number into your calculations.

Contrary to popular belief, you cannot invest your IRA in property you already own. Furthermore, even if the property is a “so-called” vacation home, you cannot legally use it, even occasionally. And all expenses relating to the property must be paid from the IRA.

Bottom line: It may not be worth it. Talk with your advisers about other investments that may be available for your IRA.

Question: I have a friend who owns his home outright. He is in financial difficulty but refuses to look into a reverse mortgage because an attorney friend of his told him to stay away from reverse mortgages. In my opinion, a reverse mortgage sounds like the only way for him to go since he has no wife or children to consider when he passes. Any ideas why people are afraid of reverse mortgages? – Cindy

Cindy: That’s a very good question. To some extent, journalists may be part of the reason people don’t like reverse mortgages.

Over the years, I have often written that a reverse mortgage should be the last resort; see if you can get a new loan or refinance your existing mortgage before looking at a reverse.

Why was I so negative? Two reasons: First, the upfront costs were very high, and second, all too often there was no regulation and no enforcement against the reverse mortgage lender. For years, celebrities like Fred Thompson, Henry Winkler or Pat Boone were touting the benefits of reverse mortgages, but they were not disclosing all of the facts – all the pros and cons.

However, there have been significant changes in recent years. First, in order to get a reverse mortgage, you now have to demonstrate you have the ability to pay your real estate tax and maintain adequate homeowner insurance. Second, before you can get such a loan, you must meet (or talk) with a professional housing counselor. You have to know the facts before you can get this kind of loan.

Yes, in your friend’s situation, since he has no real family, a reverse mortgage probably makes sense. However, I will continue to strongly suggest that anyone considering a reverse mortgage should first look at all the options, such as refinancing, selling and downsizing from your present home or getting loans or gifts from relatives. Once you have carefully reviewed all options, then make your decision.

Question: I am an owner in a six-unit townhouse fee simple (a building where the owner pays for some exterior maintenance) with $200 annual assessment complex. Last year, we decided to have the complex painted. However, one of the owners wanted to wait until the spring. Currently, the same owner is negligent in returning the painting company’s emails in regards to paying the deposit.

Do the other five owners have any recourse? We would really like to get the complex painted. As an added note the negligent owner lives out of state and is renting out the unit. – David

First, did the association formally vote to paint the complex? Was the out-of- state owner advised of the vote? Do you have proof that she got notice?

If you are satisfied that you all complied with the legal requirements in your association, then all of you should pay the contractor and then pursue legal action against that owner.

You should retain a local attorney who can guide you through the process. You might be able to file a lien against her home, and, in fact, you might even be able to foreclose.

Different states have different collection procedures, but the fact that the owner is out of state should not be a problem.

Source: Buying tips

What Not To Do When You Are Moving

What Not To Do When You Are Moving

Whether moving across town or across the country, packing up and moving can be stressful, costly and full of surprises. From shady movers and inaccurate price quotes, to overpacking or not allowing enough time to get the move set up, every step of a move has the potential for mistakes that can make a move a nightmare.

These tips will help anyone preparing for a move, whether they currently live in a house, an apartment, a dorm, with friends or with mom and dad.

1. Hiring a shady mover.

We’ve all heard horror stories about moving scams, and perhaps maybe you’ve been the victim of a moving scam yourself. You can steer clear of a less-than-upstanding mover by doing your homework. The Better Business Bureau, Angie’s List, your state transportation regulator and the U.S. Department of Transportation — and even your relatives, friends, neighbors and colleagues — are all good sources of information about whether a moving company is on the up-and-up. Doing some homework online can save you a lot of heartache on moving day.

If you’ve done your research and still aren’t confident in the movers you’ve come across, you always can go the DIY route — just be sure you’re up for the task.

2. Messing up the quotes.

If you hire a mover, you should be able to have someone from that company come to your place for an in-home moving estimate. If a moving company won’t do an in-home estimate, you should think about shopping around for another mover.

Along those lines, don’t rely on just one quote from one mover. Contact several movers for quotes. If you really like one mover over another but your favorite company is a little pricey, try negotiating for a lower price. Always make sure to get a moving estimate in writing.

3. Packing too much stuff.

Do you really need those old boxes of baby clothes that you haven’t laid eyes on since your 6-year-old was in diapers? Before you move, you need to “edit” your belongings. Think about whether you can trash some of your possessions, donate them to charity, or give them away to friends and relatives. Perhaps you could hold a garage sale to clear out some of the clutter. If you haven’t seen, worn or used something in a year, it’s best to think hard about whether you need to keep it — and whether you need to haul it to your new place.

4. Failing to schedule your move well in advance.

During the summer months, good moving companies are booked up quickly. Rather than waiting till the last minute, make sure your move is scheduled weeks — or, better yet, months — in advance. You don’t want to be scrambling to find a mover the day before you’re supposed to head out. Moving already is stressful enough without adding that frustration.

5. Ignoring the need to pack ahead of time.

You’ll find very few people who’ll say that packing is fun. In fact, a recent survey found that people who’d moved in the past year identified packing and unpacking as the biggest hassle in the process.

You can lessen the load by beginning to pack well before moving day comes along. Start by boxing up stuff that you won’t need right away — for instance, if you’re moving in the summer, pack up your winter clothes so that they’re out of the way. Also, be sure to carve out time in your schedule to check items off your packing to-do list.

If you get down to the wire and need help with packing, enlist friends, neighbors, relatives or colleagues to lend a hand. Make sure you’ve got plenty of food and beverages as a “thank you” for your volunteer helpers. If you can’t rustle up any free help, consider hiring laborers to do the packing for you; that may be a small price to pay to alleviate moving-related stress.

Source: Buying tips

Saying 'I Do' To Your House Before Your Spouse: Here's What You Need to Know

Saying 'I Do' To Your House Before Your Spouse: Here's What You Need to Know

A home of your own complete with a white picket fence, the realization of the “American Dream.” If you’re unmarried, though, you might feel this dream is out of your reach. After all, aren’t wedding bells supposed to proceed house hunting? Well, according to recent stats, there are many couples who are reversing the order of things and opting for home ownership before marriage.

Stats on Home Ownership Before Marriage

According to a study by Coldwell Banker, one in four couples, between the ages of 18 and 34 years-of-age bought a house together prior to marriage. Another poll performed by MONEY discovered that 40% of millennials feel it is a good idea to put home ownership before marriage. Perhaps, you agree and would like to realize the American dream of homeownership before saying “I Do.” Read the helpful tips listed below for turning your dream of home ownership into a reality:

Learn Your Credit Scores:

While married couples are often viewed as a single unit, you have the advantage as an unmarried couple to decide which person best fits the home buyer profile. This of course means, which of you has the best credit score and the most assets. You can choose to cosign or own your home jointly if you prefer. Keep in mind, though, that if one of you has a less than stellar credit rating, it could reduce the amount of money you qualify to borrow. 

Title Your Home Properly:

There are three main options you can use to title your home as an unmarried couple. They are as follows:

1.Sole Owner: This means one of you is the sole owner, 100% responsible for the debt. The other is not listed on the title at all, thus they have no rights or responsibly regarding the property.

2.Tenants in Common: This means that both of you own the property but in differing amounts. For examples, one partner might own 60%, while the other has 40% ownership. Keep in mind this will prevent your home from transferring in its entirety to a surviving partner should one of you pass away. Instead, the living partner will simply retain their percentage of ownership. To get around this, partners can “Will” their percentage to the other partner to transfer upon their death.

3.Joint Tenant: This gives you equal ownership of the property. If one of you should die, the property will automatically be awarded to the living partner.

Understand That the Debt is Permanent:

If you choose to enter into a joint tenancy arrangement and your relationship ends, you are still both 100% responsible for the outstanding debt. Although you might not want to think about the “what if scenarios,” it’s important for you to choose a home you can afford to pay for on your own. This will also come in handy if your partner becomes ill or loses their job and is unable to contribute financially.

Create a Legal Agreement:

Yes, technically, if you own the property jointly you are already both legally bound to the property. However, this agreement is slightly different. Seek out the help of a lawyer to create a binding agreement that outlines who will be responsible for what aspects of the property. For example, figure out and specify who pays the rent, the taxes, repairs on the home, etc. This will prevent a lot of heartache down the road by getting expectations out in the open from the beginning.

Understand Buying a Home Isn’t Easy:

This article on Angie’s List is super helpful as it talks about everything you have to do before buying a home. It examines the importance of loan qualification, home inspections, and timing when it comes to buying a home for the first time. Read it over if this happens to be your first time entering the home buying process.

Know the Expenses Doesn’t Stop at The Purchase Price:

Home ownership is a grand adventure. One that also comes with many unexpected expenses. Just take a look at the true cost of repairs on Home Advisor for an idea of what you could be facing. However, by in large, the benefits of homeownership far outweigh the problems.

We wish you and your partner happy house hunting as you face this new adventure of home ownership head on! 

Source: Buying tips

Rent Burden On The Rise

Rent Burden On The Rise

The world has changed and renting has changed right along with it.

Renting has long been the traditional first-step toward home ownership and, in later life, a lifestyle-simplifying option for long-term property owners intent on liberating equity.

  • The latest Report by The Pew Charitable Trusts reveals that the lingering legacy of the 2007-09 Great Recession is more households making a slower transition to homeownership because they are “rent burdened.”
  • This research also showed that senior-headed households were more likely to be rent burdened than households headed by people in other age groups.

In the Pew Report, “American Families Face a Growing Rent Burden: High

Housing Costs Threaten Financial Security and Put Homeownership Out of Reach for Many,” authors define “rent burdened” households as those spending more than 30 percent of their pretax income on housing. Such

families are usually “more financially fragile” than those spending a lower percentage of their income on rent and than those who own their own homes. “Severely rent burdened” refers to households spending more than 50 percent of their income on rent.

  • Rent Burdened: The Report examined how, between 2001 and 2015, increasing rent cost affected the ability of American households to use financial services, accumulate savings, and transition to homeownership. In 2015, 38 percent of the more than 40 million U.S. renter households were rent burdened, an increase of about 19 percent from 2001.
  • Severely Rent Burdened: In the same period, the share of renter households that were severely rent burdened increased by 42 percent. Escalating rent burdens were driven in part by year-over-year growth in housing costs — rent plus utilities — that far exceeded increases in pretax income. This means that after paying rent, many Americans have less money available for other core needs than similar households did 20 years ago.
  • Data Source: Pew research was based on the University of Michigan’s Panel Study of Income Dynamics, the longest running (since 1968) longitudinal household survey in the world. This survey of 18,000 in 5,000 American families has generated data about household finances that is free and broadly accessible.
  • +55 Renters: Pew Project Director Erin Currier said she was most surprised to learn that, although the share of renter households has increased by 10 percent for all age groups, the current rental spike is propelled by renters 55 and older. In 2015, about half of senior-renter families were rent burdened with more than one-fifth severely rent burdened.

What’s the eviction picture in your community?

The Eviction Lab The Eviction Lab at Princeton University explains rent-burden patterns this way: “Today, the majority of poor renting families in America spend over half of their income on housing costs (rent plus utilities), and eviction is transforming their lives. Yet little is known about the prevalence, causes, and consequences of housing insecurity.”

Sociologist Matthew Desmond, author of Evicted: Poverty and Profit in the American City, discovered that eviction, incredibly prevalent in low-income communities, functioned as “a cause, not just a condition, of poverty.”

In 2017, Desmond established The Eviction Lab with the shared conviction that “a stable, affordable home is central to human flourishing and economic mobility.” The Lab’s nation-wide data bank ] of more than 80 million eviction records going back to 2000 is accessible to the public and researchers at no charge.

The Lab’s open invitation to policymakers, community organizers, professionals, and anyone interested in real estate encourages the use of online tools like The Map to understand how eviction, and the associated traumatic and financial loss, are shaping individual communities. The intent is that this participation will contribute to laws, policies, and programs that are effective locally in reducing poverty and eviction and fostering residential security.

How are evictions affecting value in your community?

Researchers believe that sharing data about local housing, eviction, and poverty patterns will raise awareness of local issues and stimulate development of new solutions. This in turn should improve understanding of what drives poverty in America and what can be done to strengthen housing stability for low-income families and communities.

Two Faces of Rental…

Real estate investors, property owners, and related service providers see rising rents and increasing rental demand as investment opportunity:

  • At its best, this investment drive will lead to the construction of more rental units which may stabilize demand and pricing.
  • At its worst, this could result in evictions — already considered at crisis levels by many — rising above the almost 1 million evictions annually.

As research raises awareness of the social impact of rent burden is there room for both sides — landlords and tenants — to benefit from decreasing eviction and creating healthy stable rental markets?

After more than 40 years in property management, Jeff Cronrod developed LeaseGuarantee, a cosigner product that guarantees tenant performance to protect landlords from financial loss through eviction. This product helps landlords, but I asked Cronrod whether tenants may benefit, too.

Cronrod responded by email: “As for tenants, LeaseGuarantee may be used to offset all or part of the required move-in money, thus significantly reducing the cash required to secure a new rental. Additionally, a tenant who has had some credit challenges in the past can use LeaseGuarantee to help them qualify for a unit without seeking a cosigner. A tenant who successfully completes their tenancy without delinquency may also have their credit bolstered if reported to the credit bureaus.”

Renting is no longer the cheap, easy-to-arrange housing alternative in many communities. Rents continue to steadily increase, demand is continually growing, homeownership is on the decline, incomes have not kept pace with rising real estate and rental costs, and short-term rental is monopolizing housing stock. What’s next?

Source: Buying tips

Get The Home You Want, Millennials: Smart Strategies For First-Time Homebuyers

Get The Home You Want, Millennials: Smart Strategies For First-Time Homebuyers

Hey, Millennials. Come on into the real estate market! We really need you to buy some homes so we can keep chugging along. Oh, wait. Prices are rising and so are interest rates, plus inventory is scary low. Hmmm. Well, come on in anyway, wontcha?

It’s not easy to buy a home in a hot market where inventory remains at historic lows – and that covers a lot of areas across the country at a wide range of different price points. But it’s especially hard right now for Millennials, who aren’t exactly getting a warm welcome from the market that has been begging them to participate.

“I think it’s fair to say this is the most competitive housing market we’ve seen in recorded history,” Danielle Hale, chief economist for Realtor.com, told Curbed. “There’s record low inventory and strong interest from buyers in getting into the housing market. Millennials are reaching prime homebuying age – in 2020, the greatest proportion of that generation will be turn 30 – just as baby boomers are looking to downsize. This has created especially fierce competition for smaller homes, the type of starter homes that most first-time buyers desire. This dynamic can be especially frustrating for young adults because they may be bidding for the same smaller home as someone from an older generation who can lean on the accumulated wealth of decades of homeownership.”

But that doesn’t make buying impossible – just a bit more challenging. Get a leg up by following a few smart strategies.

Work with the right REALTOR®

This is not the right time to give your brother-in-law’s cousin’s neighbor who just got his license a shot. Having a competitive edge is more important than ever, and you need a savvy, experienced, and well-connected real estate agent to help you buy a home.

Work on your down payment

You may be competing against buyers who are coming in with an all-cash offer, which you’re going to have a hard time standing up to. But, there are ways you can make your offer look better. Remember that if it comes down to a multiple-offer situation for your home, sellers won’t just compare the offer prices. They’ll look at your down payment and the terms, and you need to have better terms than the next guy. You may only have 3.5% down, and that may be all you need to qualify for your FHA loan, but that doesn’t mean the seller will embrace you.

“Your down payment is a key part of the offer you present to the seller,” said Money Crashers. “The general rule of thumb is simple: the larger the down payment, the stronger the offer. More precisely: the greater the down payment’s share of the total purchase price, the more likely the seller is to accept.”

If you’re ready to buy and there’s no time to get a second job or go into hyper-savings mode, you can always take advantage of down payment assistance programs like the National Homebuyers Fund or hit up a relative. “If you’re struggling to pool enough cash for your down payment, a generous relative or friend can help by giving you money,” said NerdWallet. “But the money must be a true gift, not a disguised loan, and it must be documented properly through financial statements and a gift letter. If the gift is really a loan that you have to pay back, lenders won’t accept it.”

Be flexible on the closing

If another potential buyer is insistent on a 30-day close, but you could close earlier, later, and even rent back to the seller if need be, you just might end up with the house you want. Flexibility is key to submitting a winning offer, so make sure you have a Plan B – a place to stay for a few days or longer if you’re going to be between houses, and a mover/storage option squared away.

Look in adjacent neighborhoods

Yeah, you have your heart set on a specific neighborhood. But if it’s just not happening, consider the next neighborhood over. Experts say they have great potential upside.

Consider the worst house on the block

Buying the ugly duckling is a top strategy for investors, and one that can get buyers in the door (literally!) if they’re having trouble purchasing move-in-ready homes. “When your budget as a first-time buyer doesn’t stretch to a house in perfect condition in a neighborhood you adore, you might consider buying a home that needs work. Or maybe you’ve watched fixer-upper TV shows and think you could handle sweat equity. Either way, real estate experts say buying a house that needs renovating can make sense as long as you are realistic about the process,” said the Washington Post. “A fixer-upper can be a smart investment, particularly if you can buy a property under market value and then increase its value with the right projects. While some home buyers prefer move-in-ready homes, they are stuck with the choices the previous homeowner or builder picked for their countertops, fixtures and floors. Not only do buyers of fixer-uppers get to select their finishes, they also can make sure the work is done the way they want.”

If you’re worried about how you’re going to pay for all those renovations, ask your real estate agent or lender about a 203(k) loan, which rolls renovation funds into your mortgage. “An FHA 203k loan, (sometimes called a Rehab Loan or FHA Construction loan) allows you to finance not one, but two major items 1) the house itself, and; 2) needed/wanted repairs,” said The Mortgage Reports. “Because the lender tracks and verifies repairs, it is willing to approve a loan on a home it wouldn’t otherwise consider.”

The loan addresses a common problem when buying a fixer home: lenders often don’t approve loans for homes in need of major repairs.”

Waive contingencies before you submit your offer?

Note the question mark. Your real estate professional may caution you against this strategy. But, lenders like Better Mortgage are making it work with a program that “allows buyers in select markets to not only underwrite their finances, but also get the appraised value of their home before they submit an offer. That means they have the option to waive both financing and appraisal contingencies to make their offer as competitive as cash.”

Source: Buying tips

Property Survey Always Wise, Often Required

Property Survey Always Wise, Often Required

Question: At our settlement recently, a lawyer charged us $150 for a survey. When we questioned this charge, we were told it was a lender’s requirement and we could do nothing about it. Just what is a survey?

Answer: I hope the lawyer at least gave you a copy of the survey and fully explained it to you.

It is important to distinguish between a survey and an appraisal — both of which are usually charged to the buyer. An appraisal assists the mortgage lender in assessing the value of the house so as to determine whether a mortgage should be made and in what amount. Generally, the appraisal will analyze the condition of the house, its location, structural soundness and comparable sales in the area.

A survey, on the other hand, goes to the question of the marketability of the house. There are, however, several kinds of surveys: (1) location, (2) boundary, (3) if involving a commercial property, an American Land Title Survey, commonly referred to as an ALTA survey.

The typical survey that the homebuyer gets at the settlement (escrow) is the location survey. Oversimplified, all it does it show where the improvements (the house, fence, shed) are located as they relate to the boundary lines. The survey typically will inspect the area and then submit the survey. Usually, this will cost a few hundred dollars.

It does not, however, show you where the actual boundaries are. To do this, you will need to order the Boundary Survey. Here, the survey will — in addition to showing the location of improvements — determine where the property corners are, and then prepare a more detailed presentation. Often, however, it is very difficult to locate the corners of a piece of property. Years ago, great-grandma Smith told her attorney “the end of my property is where the oak tree stands.” And that’s what her deed — and all successor deeds read. However, the old oak tree was demolished years ago. To be precise, the survey will have to do a lot of research, legwork and measurements. So such a survey will be more expensive.

The location surveyor determines whether the house is within the property borders, whether there are any encroachments on the property by neighbors and the extent to which any easements on the property may affect legal title.

Lenders always insist on obtaining a clear “lender’s” title insurance policy covering the face value of the mortgage. Title companies will issue an exception to title unless a survey has been ordered, and thus surveys are usually required.

My own belief is that everyone buying a house should obtain a survey whether or not the lender requires it. You can at least start with the location type. It is a good idea to learn, for example, whether there are any building restrictions affecting your right to add a porch or a fence. Equally important, does the next door neighbor have any possible claims of adverse possession? If the survey shows an encroachment — one way or the other — on a next door property, a potential buyer must investigate very carefully before taking title.

But, here are some suggestions involving the survey process.

First, location survey prices vary considerably. I’ve seen them as low as $130 and as high as $300, for the same single-family house. Ask your settlement attorney for an estimate. If it seems too high, arrange for your own survey and make sure a copy of the survey gets to your lender well in advance of settlement. It must be done by a qualified, licensed surveyor.

Next, ask your sellers who did their survey. Unfortunately, most lenders will not honor a survey if it is more than six months old. But inquire from the prior surveyor whether the old survey can be updated and whether this will save you some money. Some of the more reputable surveyors are happy to get your business and will give you a break in the price.

Additionally, if you are refinancing your existing home, some lenders and title insurance companies are willing to accept a survey affidavit instead of a new survey. You will have to sign an affidavit that no improvements have been made to the property since you originally purchased it. These affidavits are available at a minimum cost.

You should also go to the local government surveyor in the land records office where your property is located. They are quite helpful and may be able to assist you with boundary questions, easement issues and such.

If you are buying a condominium unit, you will not have to obtain — or pay for — a separate survey of your unit. That survey has already been done as part of the plans which were recorded with the condominium documents. But that does not excuse you from carefully reviewing the condo plats and plans. For example, are there limited common elements that impede your access to the roof? Do you have a limited common element?

Finally, if you are considering installing a fence — or even a swimming pool — in the future, you will want stakes posted, it will cost you additional dollars. You should make the necessary arrangements for stakes at the time you order the survey.

And don’t forget to get a copy of the survey from your settlement attorney.

Source: Buying tips

Buyer Love Letters Often Work; But They Can Backfire Too

Buyer Love Letters Often Work; But They Can Backfire Too

In many areas of the country, housing inventory is low and competition among buyers is intense. When that happens, many buyer’s agents will encourage their clients to submit a cover letter – frequently referred to as a “love letter” — along with their offer to purchase. Sometimes such letters are submitted — in any kind of market — in order to take the “sting” out of a below-list-price offer. In the tight inventory market, their purpose generally is to induce the seller to find some reason to favor the offer of the letter-writer rather than that of some other buyer.

While such letters are not (yet) standard practice, they are certainly not uncommon. A recent Google inquiry for “letters from buyers to sellers” turned up more than 1.5 million hits in a matter of seconds. In 2015, a Redfin report revealed that 43% of successful offers had included a buyer-to-seller letter.

An internet search shows not only that such letters are popular, but also that there is no shortage of people and organizations who will show you how to write one. Templates for these letters abound. They range from a standard letter format to slick marketing pieces complete with graphics and places for pictures.

Advice as to the content and emphasis of buyer letters varies. Some focus on the characteristics of the property. They suggest that the buyer focus on aspects of the property that it is assumed the seller enjoyed as well. “I know that our collies will love romping in that backyard meadow just as your Labradors do.” Others will call attention to aspects of the property to which it is assumed — possibly known — that the seller had an emotional attachment. “We will give that rose garden the same loving attention that you did.”

Others advocate that the buyer’s letter should seek to highlight some personal similarities between the buyers and sellers. This is based on the premise that people like to interact and do business with people like themselves. So, if “our little Susie loves the Girl Scouts just as your daughter does” or “if we are both dyed-in -the -wool Raider fans’, mention it. Call attention to your similarities and differentiate yourselves from your competition.

Of course, there can be downsides to buyer love letters as well. In 2016, attorney Jon Goodman caused a bit of a stir when he presented on the topic at the annual meeting of the National Association of REALTORS®. Goodman developed a scenario in which a buyer’s offer was rejected. The offer had been accompanied by a letter that contained a photograph of his family. The buyer was, as Andrea Brambila, writing in Inman News put it, “a visible member of a historically oppressed minority.” Subsequently, the buyer who was rejected learned that the house had sold for a considerably lower price than his offer. Quoting Goldman, Brambila wrote, ” ‘If we had had his life experiences, we might have perceived what he perceived’ — that his offer was rejected because he was a member of this minority, in violation of the Fair Housing Act…”

Not in all, but certainly in some, buyer-to-seller letters there may lurk the potential for a Fair Housing Violation. This has led some attorneys to advise that sellers and their agents make it known that such letters will not be accepted. That is extreme caution. Others have simply suggested that, if they think there is a potential problem, sellers and their agents should be careful to document the business reasons for taking another offer.

A more likely reason for exercising caution with buyer letters is discussed in a 2015 Realtor® Magazine article, “Don’t Write Me a Love Song”, written by Christine Smith. Smith points out that buyers who reveal their emotional connections to the property are likely weakening their future negotiating positions. Their offer may be accepted, but there is almost always another negotiation or two down the road — after the property inspections. If a seller believes the buyers have truly fallen in love with the property, he or she is less likely to give in when those future negotiations arise.

Source: Buying tips

Small Renovation, Big Hassle: How To Prepare For The Unknown When Buying A Home

Small Renovation, Big Hassle: How To Prepare For The Unknown When Buying A Home

“You never know what’s behind the walls.” This renovation mantra is so important and should be tattooed on the forearm of everyone about to embark on renovation or even small updates to their home.

The horrific discovery of knob-and-tube electrical wiring masquerading as updated electrical in a 100-year-old home is a great plot point on House Hunters Renovation – but a brutal, and not inexpensive, setback in real life. But, it’s hardly the only issue you can come across when doing renovations, and you’re not immune because your home was built 20 or even 10 years ago or you’re just doing a few little things here and there to freshen up the place. Before you get started on these renovations, protect yourself by taking a few key steps.

Load-bearing walls

Many a renovation has gone off the rails because a load-bearing wall made it difficult and expensive, or darn near impossible, to move. While you may not be able to eliminate every potential surprise, you can give yourself a leg up by hiring a professional to take a look before you buy, and certainly before you swing the hammer.


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“An experienced general contractor can do an initial consultation and assess your wall for as little as $100,” builder Jeff Andreson told Houzz. An architect is another possibility because they may approach the situation differently, which could save you money. “A structural engineer may also be required,” and is often your best bet for achieving peace of mind.

Plumbing

“Homebuyer inspections are the rule these days,” said Angie’s List. “Sometimes plumbers are called in to do a more thorough follow up inspection. Unfortunately, this often happens after the home has already been purchased.”


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And the issues can be costly. Hiring a plumber to check everything out before you purchase could uncover problems throughout the house, from the main sewer line to water heaters that could cause extensive damage if they leak or burst, to leaky toilets. “One problem homeowners often neglect to have fixed is a leak at the base of a toilet,” they said. “The leak often appears small or insignificant, but over time the water will begin to rot the subfloor and even get between the subfloor and the finished floor. Someone unaware of the damage this kind of problem can create, may try to seal this themselves, sometimes making it worse.”

Foundation

If you have a home inspection, which you obviously should ALWAYS do, your inspector will look for signs of foundation damage. But, there are things you can look for ahead of the inspection that may impact your decision to purchase, such as: cracks in exterior and interior walls, cracks in floors, gaps around windows and doors, and doors that stick. Foundation issues can arise regardless of the age of the home, and could be indicative of a serious problem in places that are prone to earthquakes. But you also want to take them seriously in areas with known soil issues, like Texas.


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“All foundation problems are not equal,” said RE/MAX real estate agent Bill Gasset. “A few settlement cracks may be normal and safe, but you need an inspector to tell you one way or the other. Foundation repair can be expensive, something to keep in mind when you consider the price of the home.”

Electrical

Back to the old knob-and-tube situation. If someone has deliberately tried to hide illegal or dangerous wiring, that’s obviously a huge issue, both ethically and financially. And, it’s one you likely won’t find out about until you get inside the walls. Also, you may or may not have recourse against the seller since it will be difficult to prove there was knowledge that necessitated disclosure.

Even in a newer home, issues with the way electrical fixtures were installed could make what you thought was a quick and easy update into a larger undertaking. This is what it looks like under the bathroom light fixture we just had removed. It lacks the support and structure to properly install the new fixture we purchased, so we would either need to spend a bunch of money to shore up the situation inside the wall or get a different fixture that can be installed directly into the studs (We chose option B.). While not a huge problem, it was an unexpected one, and one that required us to spend more money, extend our installation timeline, and depend on our contractor to redo his schedule to accommodate us – not an easy feat. Ultimately, it was a good lesson for how to prepare for any type of renovation.

  • Add time to any job – You just never know what’s going to come up
  • Research potential issues so you’re better prepared to roll with whatever comes your way
  • Have a Plan B – See first bullet point
  • Set aside extra money – Ditto

Establish a good relationship with your contractor – When problems or unexpected issues arise, it may just be your good humor and the rapport you have established with your contractor that keeps you at the top of his schedule instead of having to wait weeks or longer to get your updates done

Source: Buying tips

What To Consider If You Are Buying An Historic Home

What To Consider If You Are Buying An Historic Home

You’ve fallen in love with an old Victorian house and want to bring her back to her glory days. With dreams of starting the next row of “painted ladies,” you close the deal.

You may already have some ideas of things you want to do to your new home, but before you make any changes to the structure itself, do a little research and make sure you have the answers to these three questions:

1. Is your home designated as historic – part of a state or federal historical building or neighborhood registry? If so, you may have to adhere to a number of regulations and be subject to some historical preservation oversight in order to update the home.

2. How extensive do you want the updates to be? Do you plan to “take it back to the studs,” or simply do some cosmetic work like refinishing floors?

3. How authentic do you want the renovations to be? The more accurate the details, such as spindle bannisters and egg and dart moldings, the higher the cost in materials and labor.

Your home and its state of repair may dictate which course of action you choose. For example if your home has serious structural damage or decay, then preservation may not be possible. However, you’ll still be able to reconstruct and renovate.

Not sure if you should preserve, restore or renovate? Here are a few definitions that may help you form a plan:

Preservation means restoring and using the building for its original purpose, with as much of the original features and décor saved as possible.

Restoration means tearing out improvements made over time that don’t reflect the original age and style of the home, and then repairing those areas to closely match the original size, shape, color, etc.

Reconstruction means making major changes to the floor plan such as adding new rooms and dramatically altering and repurposing parts of the home.

Renovation or remodeling freshens the look of the home using modern materials such as updating an older kitchen with custom cabinetry, farm sinks and granite countertops.

Before you begin, find out if there are any local or state subsidies for historic preservation for homes in your area. You could get tax breaks and special home improvement loans or other assistance. Contact your local tax assessor-collector for more information, or your local housing authority.

The National Trust for Historic Preservation has some excellent resources for homeowners of older or historic homes. Also, check out historicproperties.com and thisoldhouse.com for more information.

Source: Buying tips

New Construction: Should You Go Builder Grade Or Upgrade?

New Construction: Should You Go Builder Grade Or Upgrade?

Who hasn’t walked through a model home and thought, “I’ll take it! Even down to those fancy place settings on the dining room table!” That exclamation is typically followed by a sad-face realization that, A) The place settings are not for sale, and; B) All those fancy upgrades are going to cost you. A lot.

Models are typically fancied up by the builder and interior designer and outfitted with all kinds of bells and whistles including upgraded flooring, countertops and appliances, lighting, window coverings – you name it. The idea is to show buyers what their home could be. If they have an extra $100K or more to sink into it.

If that’s not you, either because you want to stay within a certain budget or you’re already stretching to buy a new home, you don’t have to forgo upgrades altogether. In fact, buying a home with builder grade everything is not considered a great idea from a value standpoint.

“A surprisingly large amount of the money you spend on your new home will be determined by the options and choices you make – and those options are forever changing,” said New Home Source. “For example, granite countertops and stainless steel appliances, both considered pricey upgrades for years, are now standard in most new homes. However, going with the most common (or lowest) denominator is not always the best way to save—or spend – your dollars.”

There’s also the fact that, when you do go to upgrade later on, you’ll have to deal with a number of issues. Here are five reasons to do some smart upgrades now.

The cost

Ultimately, how much you upgrade (or not) is dependent on cost. Finding out that a model home has $86,000 worth of upgrades, which far exceeds your budget, can be devastating. Breaking them down to individual items and comparing the cost to what you would spend down the road is a good first step.

It’s also important to remember that your selected upgrades don’t require you to write a check to the builder. They get rolled into your mortgage. Add $20,000 in upgrades to your $400,000 mortgage, and you’re looking at about $80 a month.

Yes, you may be able to finance your new floors or countertops at Home Depot, and you may even be able to qualify for zero percent interest. But, those payments will be spread out over only 24 or 36 months, instead of 30. If you’re worried about adding to your bottom line, an extra $300 per month could hurt.

The value

In considering your options and upgrades, weigh wants and needs against potential value. “When selecting builder upgrades for your new home, you need to be strategic,” said Houzz. “You want to choose the upgrades that will save you hassle and money by doing them upfront.”

Some upgrades provide instant value. “The idea that you have to wait years to see a return on your investment is false,” said New Home Source. “A quality refrigerator and freezer can keep food fresh longer without drying out – and with the cost of food rising, this is a savings you’ll notice immediately,” certified kitchen designer Joyce Gardine Combs told them.

Hardwood flooring is a classic that “never seem to go out of style,” said New Home Source, and kitchen cabinets are a great way to go. “Moving up from standard cabinets to semi-custom gives you way-better construction and longer-lasting finishes,” said Houselogic. “You’ll get a wide range of colors and styles to choose from, lots of storage options, and long-lasting details such as dovetailed drawer joinery and cool hardware.”

Other upgraded appliances may provide additional value – a great dishwasher can use less water and provide other energy savings. Quartz countertops may not be provide much in the way of cost savings but they do represent the most popular material today, which is predicted for many years to come. If it’s something you just can’t live without, and you’ll regret not doing it from day one, the extra cost may be worth it. But, keep in mind the reality of countertops when it comes to new construction. “Though the glitz of sparkling quartz or luscious marble countertops may be pretty compelling to go for now, if you can wait and get them later, you’ll gain choice and may end up saving money,” said Houzz. “Builders typically use only one supplier for natural stone or quartz counters and may offer limited options. And with the builder’s premium, the cost can be quite a bit higher than if you sourced the material and labor yourself.”

You don’t have to worry about contractors

We’ve all heard the horror stories about contractors, but even if you find a good one, you’re still going to have to contend with having people in your home and making sure they show up on time (or at all), work within the agreed-upon timeframe and budget, and do what they said they will do. There is freedom in knowing that everything is going to be as you expected on day one, and that you don’t need to worry about what happens if the flooring guy is sick or doesn’t show up for work.

No mess

Your contractor will say they’re going to clean everything up and leave your home spotless. They may even mean it and make a valiant effort. But, let’s face it. You’re going to be cleaning up dust for a while. And that doesn’t account for all the mess that is created day to day. If you’re staying in the house while these renovations are being made, expect to be dirty. All the time.

No fuss

Speaking of which…How many times have you heard people say the worst decision that they ever made was living in their home during a renovation? The alternative—relocating for a few days or more to a hotel could get expensive, and staying with a friend or family member will get old, eventually. When you upgrade before you move in, you avoid all the fuss, moving in to a brand-new home that’s ready for you right away.

Source: Buying tips

Why It's So Important To Get The 411 On A Neighborhood Before Buying A Home

Why It's So Important To Get The 411 On A Neighborhood Before Buying A Home

When buying a new home, the neighborhood is every bit as important as the house itself. So, you need to check it out. Thoroughly. Yes, you look at the schools and you figure out how close the nearest Target is and you also (hopefully) research crime reports and take a look at sex offender maps of the areas you are considering.

But is that enough?

When it comes to researching your neighborhood, what you don’t know can hurt you. What if you bought a house in this Arlington, TX neighborhood in the summer, unaware that in the winter, it’s overrun with migratory egrets. If you’re thinking it might be cool to have visitors for a few months, consider this: One homeowner in the area estimated that the egrets “cost her $10,000 on the constant cleanup of their droppings and a heavy pruning of her trees once they flew away last fall,” said NBC DFW. And, It is Against The Law to disturb them.

Google is your friend if you’re looking to learn more about potential neighborhoods. But it turns out the best tools for figuring out what’s going on are the people who may soon become your neighbors. After all, how else would you know that the woman two doors down runs a screaming yoga class out of her garage three nights a week. That the guy across the street likes to do his mowing at the crack of dawn every Saturday morning (despite the fact that he’s been warned multiple times). Or that you might be moving next to someone who is “blatantly hostile,” said The Balance.

The site detailed a story in which buyers changed courses on a home they loved when they discovered that their potential neighbors disputed the property boundaries and planted rose bushes on what was probably not their land. It gets worse. They also said, “We smoke like chimneys and plan to sit out on our front porch every night smoking,” with a smirk, “And there’s nothing you can do about it.


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Not only will meeting the neighbors “give you a good idea of whether you will be compatible, but neighbors will disclose material facts that a seller might forget to mention,” they said. “Sellers can be forgetful about these things and not purposely trying to fail to disclose.”

Meeting and talking with neighbors could give you a more detailed understanding of the neighborhood, including things that might impact your decision to buy, like:

It may be full of renters

No offense to renters, but it could be that a preponderance of them in your neighborhood affects your home values. “While it’s hard to do an analysis down to every property, we found that ZIP codes with a higher-than-average concentration of renters have lower property values compared to the county they are located in – by 14%,” said Realtor.com.

Your real estate agent should be able to give you an understanding of the ratio of owner–occupied homes to rentals in the neighborhood you are considering.

There could be plans you don’t know about

Maybe there’s a new multi-family community coming that could add traffic to the neighborhood streets and also impact the local schools. Or a new retail project with a loud preschool—or a loud bar. Or even transitional housing for formerly homeless individuals that would, at the very least, be a political football in the neighborhood.

In addition to talking to neighbors, there are a few other ways you can combat surprises in the neighborhood you’re thinking of moving to:

Visit multiple times – during the day, night, and on weekends. If you only saw the house on a Saturday afternoon, you may not know that commuters love to cut through the neighborhood twice a day, Monday – Friday. “Your new neighbor’s kid might get his drum kit out only during evenings or at weekends,” said The Mortgage Reports. “And there might have been a reason the student house on the other side was so quiet on the morning of the open house: Its residents were too hungover to get up after one of their frequent all-night parties.”

Check out Nextdoor if you can – Nextdoor is a treasure trove of information and can give you a good feel for what it would be like to live there. But, it could be tricky to get in because Nextdoor is hyper local and reserved for residents of a particular neighborhood. Try following Nextdoor’s own recommendations for joining the site in “neighborhoods outside of your primary residence,” which involves using a separate email address – but beware that you may not be able to register an address that is already being used on the site. If that doesn’t work, you may be able to ask your real estate agent for help, or perhaps a potential new neighbor can be of assistance.

Source: Buying tips

Warning: There Is Still A Lot Of Lead Paint Around

Warning: There Is Still A Lot Of Lead Paint Around

Spring is upon us and so is the season for sprucing up homes, remodeling, and even making additions. In many cases, this activity will involve homes that were built before 1978. Those situations call for particular concern regarding the possible presence of lead paint, and of taking steps to ensure that lead exposure is prevented.

Consumer use of lead paint was banned in the U.S. in 1978. That still leaves millions of pre-1978 houses where lead paint is present, sometimes under layers of non-lead paint that had been subsequently applied.

The Environmental Protection Agency (EPA) administers a somewhat complex set of rules known as the Lead-Based Paint Renovation Rule (Lead Renovation Rule). This Rule lays out the types of property to which it applies, the types of activity it covers, and the certification requirements for firms and individuals who, for compensation, engage in those activities.

The Lead Renovation Rule applies to “target housing” and to “child-occupied facilities”. “Target housing” is defined as any housing constructed before 1978, with certain exceptions. Those exceptions include housing for the elderly or disabled persons, provided that no child under six resides there or is expected to reside there. There is also an exception for zero-bedroom dwelling places, such as a studio or loft.

A “child-occupied facility” is any building or a portion of a building that was constructed prior to 1978 and that is visited regularly by the same child, under 6 years old, on at least 2 different days within any week, provided that each day’s visit lasts at least 3 hours and the combined weekly visits last at least 6 hours, and the combined annual visits last at lease 60 hours. (No, I didn’t make that up.) Child-occupied facilities may be in public or commercial buildings, as well as dwellings.

The type of renovation activity that the Rule covers is the removal, modification, or repair of painted surfaces or painted components. Exemptions to the Lead Renovation Rule include work that is done for free (no exchange of money, goods, or services), work performed by do-it-yourselfers in their own homes, work necessitated by some emergency, and minor repairs.

“Minor repairs” are defined as projects that “disrupt 6 square feet or less of painted surface per room for interior activities or 20 square feet or less of painted surface for exterior activities” where the work does not include window replacement or demolition of painted surfaces.

Firms and individuals that do work of this type and in locations covered by the Rule must be Certified Renovators. The training curriculum is an 8-hour class with 2 hours of hands-on training. Certifications are valid for 5 years. A 4-hour refresher course is required for recertification.

Penalties for violations of the Lead Renovation Rule can be serious. Last year the EPA completed 127 enforcement actions against violators. Recently (March 12, 2018) the EPA announced six lead-enforcement actions in California and Arizona that settled for a combined total of $287,000. One action was against a California leasing company that failed to follow lead paint disclosure rules. The settlement was for $148,6The Environmental Protection Agency provides a robust and easy-to-navigate web site that discusses many aspects of the Renovation Rule and also provides an interactive locater listing firms that are certified. The address is .

Source: Buying tips

Should You Buy A Home For Your College Kid?

Should You Buy A Home For Your College Kid?

If you’re about to send your child to college, you’re undoubtedly suffering from sticker shock. And it’s not just from the cost of tuition and mandatory fees and books and a meal plan and parking, but also from housing. Maybe, especially, from housing. The mouse – hole your dorm – bound child will live in for at least the next year come August or so might as well be the Taj Mahal for what it costs to shelter them in much less extravagant environs.

The high cost of student housing – not just in the first year when they are typically living in on – campus housing – is just one of the reasons people are increasingly looking to purchase property for their college kids to live in. Is this a consideration for your family? We’re breaking down the particulars.

Financial savings

Yes, it may be that buying a property for your college kid to live in is a smart financial decision. “Average prices per year for housing are more than $9,000 in college towns,” said U.S. News & World Report. “In highly desirable college towns outside major cities, housing costs can be much higher. Monthly housing prices in Berkeley, California, home of the flagship of the University of California system, can reach more than $3,000, making the price tag for the academic year more than $27,000. In Cambridge, Massachusetts, outside of university – rich Boston, the four – year price for housing can exceed $100,000 as well.”

If that has you getting ready to search for homes for sale RIGHT THIS SECOND, “Don’t forget to factor in the additional costs of homeownership besides the mortgage, like maintenance expenses, homeowners’ association fees, insurance and taxes,” they said. You may find that buying a home doesn’t make as much financial sense as you think.”

Tax savings

You can enjoy a tax write – off on a second home, which could make a college town purchase much more affordable in the long run, but you have to be careful about how the property is used and the way it is reported on your taxes. “Many homeowners look forward to purchasing a second home that can be used for vacations, rental income, investment purposes or as a primary residence during retirement. Current tax laws offer several tax breaks that can help make second – home ownership more affordable,” said Investopedia. “If you already own, or are thinking about purchasing a second home, it will be in your best interest to understand the tax breaks and how they work. Different tax rules apply depending on how you use the property, for either personal or rental use, or a combination of the two.

As long as you use the property as a second home – and not as a rental – you can deduct mortgage interest the same way you would for your primary home. You can deduct up to 100% of the interest you pay on up to $1.1 million of debt that is secured by your first and second homes (that’s the total amount – – it’s not $1.1 million for each home).”

That would mean adding rent – paying tenants/roommates to the mix would be off the table. Keep in mind also that you can deduct property taxes on a second home. You will want to talk to your tax advisor about the tax situation in the state in which you are considering making a purchase.

Appreciation

Is your child attending college in an area that is appreciating nicely? It might be a good investment to purchase a property that you can sell after graduation for a nice profit, or hold onto for passive income by turning it into a rental for future college students.

Depreciation

Then again, there is the chance that entrusting your child, and your child’s future roommates and friends, with a property you own could spell financial disaster if the home is not maintained. Worried about college parties that trash the place and/or illegal activities like drug – taking in the home, which could endanger your child’s future? If you’re thinking about buying a property for your child (and possibly other people’s children as well) to live in, you need to have an honest conversation with him or her, and with yourself, about the responsibilities involved. Is your offspring responsible enough to make smart decisions and properly care for a home?

To roommate or not to roommate

There are additional questions and potential concerns around the roommate issue. Yes, allowing your child to live with friends will provide companionship that is important for college students and will cut down on your monthly costs – and perhaps even provide some monthly income. But consider these questions from Bader Martin:

“If your child will have roommates, how much do you plan to charge them and can they be depended upon to pay their share of the rent on time each month? What will you do if a roommate – renter moves out and how long are you willing to carry the mortgage without replacing the roommate? And will your child and roommates occupy the property all twelve months of the year or only during the school year? What are your potential liabilities if a roommate is hurt on the property or loses personal possessions in a robbery or fire? Are you adequately insured?”

Retirement strategies

Individual real estate markets differ widely, and what seems like a good investment in one city may be totally undoable in another. Having an alternate or future use for the property in question can tip the scales. In some cases, parents purchase a condo or townhome in the city for their college student child to live in, with the intention of keeping it in the family for the child post – graduation, for another child intending to attend the same college, or even as a place for themselves. Another growing real estate trend has parents following their child to the city in question as part of their retirement plan.

“Increasingly, parents are also considering the move as part of a long – term plan in which they also participate,” said U.S. News & World Report. “If your child goes to school in a city whose lifestyle and cultural offerings are pleasant to you as well, why not retire there? Schools from Berkeley and Cambridge to Chapel Hill, North Carolina, and Bellingham, Washington, can be pleasant places to retire. The property you purchase could thus be part of your long – term retirement strategy.”

Stability

Having to find a new place and move every year, find storage, and put down new deposits is a drag for anyone. Buying a home that your child can live in for his or her entire college experience provides stability as well as a fixed expense they (and you!) can count on.

In – state tuition

If your child is attending college out of state, you’re being hit with even higher expenses. “About 17 percent of students attend college out – of – state, and they pay dearly for it,” said Parenting. “The typical out – of – state tuition rate at a four – year public university is three to four times more than the in – state rate.”

For this reason, parents often explore options for in – state tuition, like purchasing a property – but with varying success. “Most states have established residency requirements designed to prevent out – of – state students who become residents incidental to their education from qualifying,” said FinAid. Buying a home in the state is a good start, but likely won’t be the only commitment that needs to be made in order to get that elusive in – state tuition. It’s a good idea to learn all you can about the requirements for the school and state in question before making a purchase for this sole reason.

Source: Buying tips

Defective Home: Who Is Responsible?

Defective Home: Who Is Responsible?

Question: My son and his wife purchased their first home last year. They secured a mortgage with a lender (Note: I have deleted the name of the lender). They had looked at 5 others houses where the lender was overly critical about updates to the houses before they would give out a mortgage. The house my son and daughter-in-law agreed on and purchased had a beautifully terraced backyard. They were required to do minor fixes before getting the mortgage. Eight months later the deck is coming away from the house because the terraces were put in wrong. My daughter in law went to the town to read the permits and have the contractor come back. No permits were pulled and a repair bill of $50,000 was given by a new contractor and structural engineer.

Who is at fault? The previous homeowners, the lender or the home inspector? This is a major bill for a first time buyer and no one seems to be responsible. Thank you for your help. Lori.

Answer: Dear Lori. I know that lenders are supposed to look carefully — and critically –at the appraisal of a house they are considering making a mortgage loan, but I am surprised your son’s lender actually turned him down based on the condition of the houses.

Let’s look at the various players. First, the home inspector. Did he/she inspect the deck and say anything about it? I can’t provide you specific legal advice, but you may have a case against that inspector. I would call him and tell him that there is a problem and you want him to look at the deck. Don’t make any accusations or allegations; let the inspector take the lead in making comments. Many states protect the inspector from litigation if the homeowner has signed a statement at the back of the inspection report that states: “in the event of an error or mistake by the inspector, his/its liability is limited to the amount of the inspection”. This is called an “exculpatory clause”. However, many state courts have taken the position that if the homeowner can prove negligence on the part of the inspector, the inspector cannot use the “shield” of the exculpatory clause as a defense.

Next, the seller. Did your sales contract state that you were buying “as is”? If that’s the case, you may not have a case against the seller. And even if you did not take “as is”, I know that the seller will use as a defense “you had an inspector; if there is a problem, he should have caught it. However, if the seller knew that the contractor did not get permits for the work, you may still have a case.

Next, the lender. Generally, lenders are not responsible for problems in the house. However, in your case, it appears that the lender was actively involved in your house purchase. It was critical about other houses that were being considered, and regarding this house the lender actually required certain repairs to be made before the mortgage could be funded. So, I would think that you may be able to hold the lender responsible for some of the repairs costs.

Next: what about the contractor that installed the deck in the first place and did not pull any permits. Generally, there is a period of time (called a statute of limitations) after which you lose the right to file suit. However, there is also a legal concept called “the discovery rule” — the statute of limitations starts when the problem is first discovered.

My suggestion: do your homework, get at least one more bid from a contractor and talk with a local attorney about the feasibility — and the cost — of litigation.

Source: Buying tips

Home Buyers Should Know If The Seller Is Listening

Home Buyers Should Know If The Seller Is Listening

Imagine that you are the buyers’ agent and that you are just finishing showing them a house that, obviously, they feel is perfect for them. As you stand in the foyer talking, they begin to discuss making an offer. The three of you talk about financing and negotiation strategies. They emphasize that, although they could and would pay full price — even more! — they want to start with a lower offer. You may even agree with them, and you start talking about various alternative scenarios. Etc. Etc. All is good, right?

Now suppose that, unbeknownst to you, the seller has recorded your entire conversation and all the remarks made during your tour of the home. Both audio and visual. Not so good after all, right?

As technology evolves, and as houses get smarter and smarter, homeowners have and use expanded opportunities to know about whatever is going on in their homes when they are not physically present. Buyers, agents, and others who may have legitimate access to a house need to be aware of this and to act accordingly. Sellers, on the other hand, would love to have access to these kinds of conversations, but they need to be careful about liabilities.

Paragraph 10 of the CAR (California Association of REALTORS®) standard residential listing agreement says this: “Persons visiting the Property may not be aware that they could be recorded by audio or visual devices installed by Seller (such as ‘nanny cams’ and hidden security cameras). Seller is advised to post notice disclosing the existence of security devices.”

This language was added to the standard form agreement June of 2017. It appears in a paragraph that previously addressed security concerns. It is a safe bet that a significant number of agents are not aware of, and therefore don’t point out, the advice about posting and disclosing the presence of security cameras and/or recording devices.

To understand why the seller is advised to provide notice of recording devices, we need to be aware of California’s privacy law at Penal Code §632. It says, in part, “A person who, intentionally and without the consent of all parties to a confidential communication, uses an electronic amplifying or recording device to eavesdrop or record the confidential communication …shall be punished by a fine not exceeding two thousand five hundred dollars ($2,500) per violation, or imprisonment in a county jail not exceeding one year, or in the state prison, or by both that fine and imprisonment .”

Although the U.S. Constitution does not mention privacy (and isn’t that a surprise to many?) the California Constitution (Article I, Section 1) says that all people have an inalienable right to, among other things, “…pursuing and obtaining safety, happiness, and privacy.” The penal code reflects that. It says that Californians can’t expect confidentiality in public gatherings, or proceedings open to the public, or in circumstances where they can “reasonably expect” to be overheard or recorded, but otherwise they have an expectation of privacy and the ability to communicate confidentially.

The question then arises: What sort of notice should the seller give? Where and how should it be placed?

These matters were recently discussed in a webinar conducted by CAR legal staff. Of course, there is no one-size-fits-all answer. It was pretty clear that simply putting the notice in the MLS was not sufficient. Though it would be good as one step. Common sense — if it can be found — will probably provide the best answer from circumstance to circumstance. Certainly, the notice(s) should be prominently and clearly placed where a visitor to the property would be likely to see them.

Source: Buying tips

12 Ways Buying New Construction Is Better, Worse, And Way Different From Other Homes

12 Ways Buying New Construction Is Better, Worse, And Way Different From Other Homes

Buying a new home isn’t the same as buying an existing home. The more you know going in, the more prepared you’ll be to roll with the process – or run from the process.

Everything all bright, shiny, and new

No one else’s taste, no one else’s floorplan, no one else’s germs. When you buy a brand – new home, it’s built for you and hasn’t been lived in by anyone but you.

Decisions, decision, decisions

There are those who love the idea of selecting the flooring, the cabinets, the kitchen countertops, the finishes, and the myriad other choices that need to be made when building a new home – and then there are those who get the shakes just thinking about it. If you’re the latter, perhaps an already – built home is a better option for you.

What you see is not what you get

Model homes are typically decked out with beautiful upgrades and multiple options, and those upgrades and options can cost big bucks. If you want your home to look like the model, be prepared to shell out far more money than what the base price of the house indicates.

You’ll have a warranty

“Warranties for newly built homes generally offer limited coverage on workmanship and materials relating to various components of the home, such as windows, heating, ventilation and air conditioning (HVAC), plumbing, and electrical systems for specific periods. Warranties also typically define how repairs will be made,” according to the Federal Trade Commission’s Consumer Protection site.

The duration of coverage varies depending on the component of the house. Coverage is provided for workmanship and materials on most components during the first year. For example, most warranties on new construction cover siding and stucco, doors and trim, and drywall and paint during the first year. Coverage for HVAC, plumbing, and electrical systems is generally two years. Some builders provide coverage for up to 10 years for ‘major structural defects,’ sometimes defined as problems that make a home unsafe and put the owner in danger. For example, a roof that could collapse is a ‘major structural defect.’

Home warranties are typically extendable after that first year, although you’ll be responsible for the cost.

You may have to buy sight unseen

In some cases, model homes may not be built – or only a few of the floorplans will be featured as models – and you won’t have an opportunity to walk through the homes to get a feel for how they live. You should have pictures and floorplans to view, and maybe even a virtual tour, but if you’re the type that needs to be in it to get it, you may be disappointed.

The noise – and the dust

When considering which home to buy, the location of the lot is obviously important. But have you asked about how construction is going to roll out in the neighborhoods? It could be that your home is on a street that serves as a main artery for trucks and other construction traffic. Or perhaps you’re in a location where construction is going to be going on all around you for months. Yes, the noise and dust will disappear – eventually. But how long are you willing to wait?

Don’t expect a price reduction

You may be used to negotiating on the price of an existing home for sale, but new home prices aren’t typically negotiable. The builder or developer may be willing to throw in some upgrades as part of the negotiation, but, the hotter the community, the less likely you are to get anything for free.

You can still work with your real estate agent

Working with an agent who is savvy in new construction will help get you the home you want and any available extras. Keep in mind that many new – home communities today offer real estate agents a commission for bringing in a buyer, but they insist that the real estate agent register their buyer on the first visit. So don’t show up alone to tour the community for the first time! You could cost your agent money and then have to navigate the purchase on your own.

It might behoove you to work with their in – house lender

If you’re already working with a lender, you obviously don’t want to be disloyal. But, there may be financial benefits to working with the builder/developer’s in – house lender. Many times, they offer a lower rate overall, will buy down your rate, or will offer you a “teaser” rate that keeps your payments lower for the first year or first few years.

Get familiar with this term: Standing inventory

If builders have pre – built homes that are waiting to be sold, this is the one place you may have wiggle room room on price. Another advantage of standing inventory is there is no construction wait, and these homes are often nicely amenitized with upgrades.

You might not be able to buy the lot you want

New homes are typically released in phases, and it might be that the lot you have your eye on gets snapped up by someone who was prequalified before you, or higher up on a waiting list if it’s a really popular community. Or, perhaps you want a homesite that isn’t set for release until later when you’re ready to purchase now. Flexibility is the key to being able to get what you want.

Amenities might not be available or built right away

If a community’s amenities are a draw for you, be sure to ask about when they will be built. It could be that the pool and community park you’re so excited about are years out from being realized.

Source: Buying tips

Can You Pass The Flipping Personality Test?

Can You Pass The Flipping Personality Test?

“Ummm, I’m not sure about that countertop. Shouldn’t they be hiring someone to do that? I would do such a better job on that flip.”

Who hasn’t said that? When it comes to flipping, we all think we’d be naturals, right? Or at least more skilled than the novices who are fumbling through it on TV. But it takes more than big dreams and good intentions to execute a successful flip, and with so much money at stake, you want to make sure you do it right. Actually, you want to make sure you’re right for flipping in the first place before you put your financial future on the line.

Take the house flip personality test to make sure you’re a fit.

Are you smart?

No one’s really going to answer, “No,” to a question like this, but put it in the context of flipping. If you think it’s easy money and you aren’t really looking to put in the sweat equity or follow the basic rules of flipping, you might want to move along.

“Don’t believe those late-night infomercials that say you can get into house flipping with no money,” said U.S. News & World Report. “Nobody is going to hand you a house for free, and you can’t go to Home Depot and they’ll give you your supplies for free. If you are using credit cards and have no money, you can get into trouble quickly.”

Are you savvy?

Smart and savvy are not the same thing. Knowing where to save and where to spend is one of the most important factors when flipping.

Are you geographically desirable?

Buying a home just because it’s affordable and in need of renovation is not a great strategy. People actually have to want to live in the area where the home is located. Paying attention to hot areas can help you pinpoint the right spot.

“The market with the biggest increase in flippers last year was Buffalo, NY, which saw a 34% surge, according to a recent report from real estate data firm ATTOM Data Solutions,” said Realtor.com. The struggling upstate New York manufacturing town was followed by New York City, at 29%; Dallas, at 23%; Louisville, KY, at 22%; and Birmingham, AL, at 17%.”

Daren Blomquist, senior vice president at ATTOM, noted that, “These markets are not the primary markets that many people would think of [for] investing in real estate. “They’re more off the beaten path, so there’s less competition from other investors and there’s more availability for deals.”

You also need to pay attention to the home’s proximity to your home. Trying to manage a flip from afar is hard even for the most experienced investors.

Do you make it personal?

You may have the greatest personal style in the world, but, when it comes to flipping, you want to make sure you’re making the right choices to bring you the most money. Likewise, you may have your eye set on some specific updates and upgrades, but adding in what you want, and not what buyers are looking for, may make your flip a flop.

“Know which home improvements increase the home’s value,” said Money Crashers. “Focus on these projects first. Home improvements that increase the value of a home might include upgrading kitchen appliances, repainting the home’s exteriors, installing additional closet storage space, upgrading the deck, and adding green energy technologies. On the other hand, avoid home improvements that won’t increase the selling price, like installing a pool, installing a whirlpool bath, or adding a sunroom to the house.”

Can you roll with the punches?

Smart planning, extreme organization, and a great, trustworthy team are all crucial to a successful flip, obviously. But if you’re the type that flips out (literally!) if something changes, goes wrong, or looks like it’s all about to fall apart, this might not be for you. Flipping is a roller coaster, and there are going to be frustrations and setbacks along the way. Accept it, deal with it, and move on.

What are your goals?

Is this a get rich quick thing or are you thinking of flipping as a career? Are you interested in doing quality work or is it just about making the place look good and getting out? Being honest about your goals will help guide you throughout the process, but keep this in mind: cut corners and shoddy work may save you money upfront, but may impact your bottom line. And, if you plan to flip more than just one home, you don’t want to earn a reputation for sketchy work.

Do you play well with others?

Even if you’re the DIY King of North America, you’re going to need help somewhere, at some time. The best flippers have a contractor they can count on and assorted other trusted professionals for plumbing and electrical, landscaping, appraisals, title insurance, and so on.

Are you rich?

Flipping is going to cost you, even if you find the magical lipstick on a pig house. And many people underestimate the potential costs, from the down payment to the carrying costs if it doesn’t sell right away.

“To get a conventional investor mortgage, you often need at least 25 percent down, though a good mortgage broker might find other options, including a lower down payment or a loan that provides some money for repairs,” said U.S. News & World Report. “Hard-money lenders will lend to nearly anybody, but interest rates are high. Another major key to success as a flipper is accurately estimating both cost and timeline. That doesn’t mean there won’t be surprises, but you want to calculate the true cost of getting the property ready for sale. When you buy a home, you don’t always know what’s behind the walls: mold, asbestos, water damage, antiquated electrical lines, foundation issues or crumbling plumbing pipes.”

Source: Buying tips

What You Should Know Before Deciding To Buy A Condo

What You Should Know Before Deciding To Buy A Condo

Condos were once thought of as homes that attracted singles or couples, often without children. But today, condos are growing in popularity and attracting families of all sizes.

Condos can be an excellent choice for the right buyers. Here are a few things that should be considered before purchasing a condo. Most buyers start with the condo itself. That may be a good place to begin but, before they buy, buyers should also consider other factors outside of the condo.

Some developers are building condos that have a look and feel like single-family homes. These modern condos have great rooms and open, flowing floor plans that look and feel like a single-family home rather than an apartment or condo.

One of the major attractions of condos is the low maintenance. The community area is maintained by an association funded by the dues that homeowners pay into it.

That’s why buyers’ first consideration should be to explore the development and make sure they like the look and feel of the complex and surrounding community. There are codes and restrictions, often referred to as CC&Rs (covenants, codes, and restrictions) that buyers will have to abide by once they purchase a condo. Buyers should ask to review them before making an offer to purchase a condo. These regulations help ensure that the community maintains its general appearance and any necessary repairs of the external areas.

Review the association’s budget. It may be necessary to get the seller to provide this information because it may not be released to a non-owner who is only a potential buyer. However, in considering buying into a development, it’s almost like going into business with the neighbors in the complex. It’s important to make sure that the association is running properly and has enough of a reserve for necessary expenses and maintenance. The budget and CC&Rs will give an idea about how stable the association is and if increases in the homeowners’ association dues are likely each year.

Find out how many owners in the development are delinquent on their dues. A condo complex that has a high level of delinquencies can cause problems for buyers when it comes time to get a loan or sell the condo. Some loans are not approved if delinquency rates are higher than 15 percent.

Review the minutes from the association’s board meetings. They will reveal the day-to-day issues that occur each month and give an indication of how the development is run. For instance, lots of complaints and filings about noisy residents, loud parties, or dog droppings on the lawn reveal potential problems with neighbors. The minutes will also reveal if the development is engaged in any lawsuits.

Understand what your responsibilities are for the upkeep of the condo. Find out what the association takes care of and what the homeowners have to maintain. Look at the association’s property management team and see how many times the association has changed management companies. Find out why. This will may reveal how responsive the association will be should residents need its assistance.

Ultimately, buyers need to ensure that when they purchase a condo they’re not buying into any legal battles the association is in the middle of and that they will be able to live in their condo the way they want. Study the CC&Rs and do due diligence before buying.

Source: Buying tips

No Perfect Home Exists: What You Should Know About Home Inspections

No Perfect Home Exists: What You Should Know About Home Inspections

For many first-time buyers, buying a home can be a scary experience. They know they’ll be maintaining or improving a home with little to no maintenance experience, so the solution is to buy a home in perfect condition. So they hire a home inspector to point out all the flaws.

The problem is — no perfect home exists. Air conditioners break, plumbing pipes leak, and roof tiles blow off in the wind.

If you’re buying a home, start with a reasonable expectation of what home inspectors can do. Their job is to inform you about the integrity and condition of what you’re buying, good and bad.

A home inspection should take several hours, long enough to cover all built-in appliances, all mechanical, electrical, gas and plumbing systems, the roof, foundation, gutters, exterior skins, windows and doors.

An inspector doesn’t test for pests or sample the septic tank. For those, you need industry-specific inspectors.

Here’s what else you need to do.

1. Make sure the inspector you hire is licensed. The responsibilities of home inspectors vary according to state law and their areas of expertise.

2. Ask what the inspection covers. Some inspection companies have extensive divisions that can provide environmental for radon and lead paint. Be prepared to hire and schedule several inspectors according to your lender’s requirements and to pay several hundred dollars for each type of inspection.

3. Some inspection reports only cover the main house, not other buildings on the property. For specialty inspections such as termites, make sure the inspection covers all buildings on the property including guest houses, detached garages, storage buildings, etc.

4. Attend the inspection and follow along with the inspectors. Seeing problems for yourself will help you understand what’s serious, what needs replacement now or later, and what’s not important.

5. Don’t expect the seller to repair or replace every negative found on the report. If you’re getting a VA or FHA-guaranteed loan, some items aren’t negotiable. The seller must address them, but otherwise, pick your battles with the seller carefully.

A home inspection points out problems, they also point out what’s working well. It can help you make your final decision about the home – to ask the seller to make repairs or to offer a little less, to buy as is or not to buy at all.

Source: Buying tips

Want To Buy A House? Here's How To Save For A Down Payment

Want To Buy A House? Here's How To Save For A Down Payment

Thinking about buying a house within the next 3 years? Or a bit farther down the road? Timing is everything and it turns out that simple question makes a difference.

According to Zillow, the median home value in Diamond Bar is $697,000. So how much of that should you put down? Down payments vary depending on the loan type, but in general they are:

*0% for VA loans
*3.5% for FHA loans
*20% for conventional loans
*Or use this handy down payment calculator to help you.

20% is the recommended down payment on a house.

You may have heard this before, but we’ll say it again. Try to put at least 20% down. Why? If you finance more than 80% of the home value, you will have to pay Private Mortgage Insurance (PMI). (But if you can take out a VA loan, PMI is not required.)

Even just 3.5% or $24,395 on a home in Diamond Bar, CA is a good chunk of money. And whether you’re fighting the good fight as a small business owner, still paying back those student loans, or just trying to save a bit each month like all of us, it’s hard to know what to do with that money you have managed to save. Which brings us to …

When are you looking to purchase a home?

1. I want to buy a home within 3 years.

If you’re looking to buy sooner rather than later, consider keeping your money in a cash account, like a savings account or something similar. Remember that savings accounts will yield greater interest than a regular checking account. You don’t want to invest this money for such a short period because of market volatility. Just think:

Imagine you’ve built up a decent amount for a down payment and you invested this money in the stock market. A recession comes and you take a 30% hit on your balance. That will likely prevent you from buying your home within your three-year goal.

2. I want to wait at least 4 years before buying a home.

If you’re not in a big rush, investing in the market might be a better option for you. Should you invest, do so with caution and don’t be too aggressive. Be smart, calculated, and balanced with your portfolio picks. Make sure you have a healthy mix of stocks and bonds. And keep in mind that you’ll want to rebalance your portfolio at least once a year. Why?

Imagine that you have a portfolio of 10 different stock and bond ETFs, or Exchange-traded funds. Each ETF is invested at a fixed percentage of your overall portfolio. As the year goes on, the allocations will wander from their targets. Those doing well will become a larger part of your portfolio. Those not doing so well will become a smaller part of your portfolio. When you rebalance, you bring things back in line with your target percentages, so you’re selling high and buying low.

Also keep in mind dollar-cost averaging, or investing a certain fixed amount on a regular schedule. Basically, you buy a larger number of shares when the markets are down and everything is at a lower price, and fewer shares when prices are high. This is recommended over making large, infrequent, lump sum contributions because it will bring the average cost per share down over time.

If these investing ideas are a bit daunting to you, you’re not alone! Speak with a financial planner to help you evaluate your options and navigate these uncertain waters. An advisor can be just the direction you need to reach your goal and buy a house.

David Yu, CFP® is a CERTIFIED FINANCIAL PLANNER with over 10 years of industry experience helping people make smart, lasting financial decisions. Visit www.pacunited.com for more information.

Source: Buying tips