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Buyer Beware Of The 5 Things Sellers Try To Hide

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purchase-homeworkYour dream home may not be what you expected it to be after signing the dotted line. Okay so you’ve found your dream home, placed the offer and are excited to sign the dotted line, but wait!

What if the seller failed to declare the negative aspects of the property such as pest infestation or cracked foundation. Here are a few common things that sellers try to hide during the sales process, and questions you can ask to have them spill the beans.

Leaks

Leaky roofs, ceilings, radiators and faucets – brokers, real estate agents and sellers may try to temporarily fix them in an effort to attract offers. But sometimes it is best to be honest, which proves that the property is well cared for.

Fact is that leaks are a common issue, and good news is that they can be fixed easily before closing day. So it’s not worth masking something that really isn’t a very big problem.

Pests

The entire house looks great, but believe it or not, termites may be chewing away at the walls while you’re admiring the expensive dining room. Laws regarding disclosure of pests vary across states, where Michigan, Texas and North Carolina require that sellers inform buyers about possible infestations during the sales process.

Emotional Defects

In most cases, sellers are not required to disclose if the property is rumored to be haunted or if a murder or death occurred there. But as a buyer you can easily get hands on this information from the Internet.

Roof And Foundation Issues

Major cracks in the foundations can cost several thousand dollars to fix so try to locate them when looking through a house. If you smell moisture in the basement, you can always ask the seller if you can cut out a piece of sheetrock and see if any cracks are present underneath.

Age Of Systems

Real estate experts claim that there are several sellers that do not reveal the age of home systems such as HVAC systems and water heaters but a home inspector will easily and quickly reveal this information.

Questions To Ask

When asking questions, don’t just limit them to real estate agents and sellers, but speak to the neighbors as well. Ask the neighbors any questions you might have about the home such as why are the sellers moving? Have you witnessed any construction problems in the area? And have you seen any repair trucks at the home lately?

Another important document to get your hands on is a CLUE report or Comprehensive Loss Underwriting Exchange, which is an information report and is available from your insurance agent. If you as a buyer still have questions, but really want to make an offer, you can actually state that as a condition in the offer and your questions will be answered at a later date, but before closing day.

Credit Confidential: What Really Powers Home Purchases

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credit-report-basicsMost homebuyers are aware of the key aspects of their credit, which play a vital role in the lender and home search approval process. But what is the best way to educate yourself on all the parts and pieces called credit score?

Three Agencies Everyone Should Know About

The three most important credit reporting agencies are TransUnion, Equifax and Experian that keep track of your credit activity and publish a report, which features your credit score. It is a good habit to get a copy of your credit report, and if you already do, you probably think that the information from any one of the credit bureaus is enough.

However, buying a home is not a small purchase so you would need as much information as possible about your credit. Although credit bureaus follow relatively similar processes to track and score your credit, not all lenders report to all three credit bureaus.

The Importance Of Your Credit History

Given the fact that the reports from all three agencies might not reflect the same information, it is best to compare all three reports to get a clear insight into your credit history, and at the same time identify any suspicious activity.

So, what role does all this information play in the home buying process? Below we highlight a few milestones that you must meet to get the information you need for your best shot at home loan approval.

Twelve Months

This is the beginning of your search process, making it the perfect time to gather all the information from all three credit bureaus and fix any irregularities if needed.

Nine Months

This is the period where you will prepare yourself to qualify, and confirm that all the information in your credit records is accurate and in place before you meet with your lender.

Six Months

This is actually the period recommended by others to check your credit score and reports. But you’ve already done this earlier, which has given you enough time to fix any spot issues. At this time, you can simply ensure your credit information is in top shape.

Three Months

At this time, you will have made your decision about your lender of choice and your decision-making support team is finalized. It is extremely important to get your credit history and fix any issues before you make an offer on a specific home.

Regardless of where you stand with regards to searching for the perfect property, it is extremely important to be fully prepared with everything you need to know about your credit. When you know as much as you can, you are more prepared for the steps ahead in the home search journey, regardless of how far along you may be. When you have complete knowledge of your credit, you gain an added edge that helps you avoid any financial surprises. Adding to this, you get peace of mind whether you’re a first time or seasoned homebuyer.

How to Find an Affordable Home

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HARP - Making Home AffordableSeasoned as well as first time buyers are wary about home affordability, but regardless of the blighted reports of home ownership, it is a significant part of the American Dream. But the biggest question home seekers are faced with is whether they can find a home that suits their budget.

According to a recent survey, potential homebuyers between the ages of 28-34 said that they wouldn’t give up on their Netflix subscriptions to save money towards home ownership. And with mortgage rules getting stringent by the year, finding a dream home is going to take some level of compromising. That said, here are a few sacrifices you can make to help you get your dream home.

Price

This is probably the biggest sacrifice you can make owing to the fact that the cost of homes in your neighborhood dictates exactly how much square footage you can get for your dollar. But the question you need to ask yourself is how much of cost sacrifice you need to make?

As a general rule of thumb, buy a home that is less costly, roughly 20 percent less than what your lender tells you that you can afford. By doing this, you’re basically bumping your budget by an additional 20 percent, which ensures that you will never be drowning in debts each month.

Liquidity

Another big sacrifice is cash in the bank, and once you have added 20 percent to your budget, you automatically lower your monthly payment with a smaller loan, no PMI (Private Mortgage Insurance) and a much better interest rate.

Neighborhood

Who doesn’t want a home in a swanky neighborhood, walking distance to the beach, but this may not always be possible. In fact, you may even have to give up the proximity to dining, shopping and recreational areas in order to comply with your budget. A great alternative is to look for homes that are close to public transportation, which will at least provide you with easy and economical access to workplaces, schools, etc.

Type Of Home

This is definitely a big sacrifice, but sometimes you may have to switch from searching for a single family home to a townhouse, condo or duplex. This may be especially out of your budget if you’re looking for homes in dense metropolitan areas. But as an alternative, you can always opt for a co-op or condo that will get you your desired address and within your budget.

Outdoor Space

Everyone enjoys backyards, with hammocks hanging from the trees and the barbeque in the backdrop. But in today’s real estate marketplace, every square foot counts so chances of finding your dream home within your budget with an expansive backyard are slim to none. As an alternative, look for a home with a great outdoor deck, and one that can accommodate a few friends and a barbeque grill.

Setting Your Home Buying Budget

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Before You Purchase Your HomeThere are several aspects to consider when buying a new home or even a second home for that matter, most importantly weighing your must-haves against your should haves. You may have already imagined the perfect home complete with four bathrooms, granite countertop, and an open floor plan… the works!

Okay so let’s rewind it back a few notches and consider the fact that this is your first home, but great chances are that it probably won’t be your dream home. In fact, before you get to buy your dream home, you will most likely make one or more home purchases, which is great.

Getting back to finding your perfect first home, the key is to find one that comes as close as possible to your dream home, but within your budget. So here are a few ways to match what you expect in your first dream home with your budget.

First Home

Your first home or starter home is more than likely not going to be the one where you’ll live for the rest of your life. And this is perfectly okay because when you think of future salary hikes and savings plans, you can imagine yourself moving into a much dreamier and bigger home. Add to this, your first home will probably be able to provide you with the cash you need to make that bigger purchase or at least partly.

House To Condo

You will have to make a choice between the two at some point, but when you start to play with your options, you must keep an open mind. You may be thinking condo, but what if there’s a house with an expansive balcony, a panoramic view and superior amenities.

Older Construction Versus Newer Construction

Most Americans prefer to buy newly constructed homes, which are generally homes purchased in pre-construction. But be prepared to pay about 20 percent more for newly constructed homes compared to pre-owned homes.

Fixer Homes

There are several benefits of buying fixer upper type homes such as the ability to renovate it the way you like, and paying a cheaper price compared to a fully constructed home. Add to this, the architectural detail that comes along with older homes that might require attention are unique and are a dream come true.

Balancing Location And Dreams

By now you’re probably already aware of your budget and how much home you can afford for it. Wouldn’t we all like to live in swanky neighborhoods, but unfortunately not all our budgets will support that choice. And keep in mind that you can live in a slightly less appealing location, but it’s highly impossible that you will be able to live in a home that you can’t afford.

So to differentiate between the must haves and should haves, the former are the essentials you need in a home such as the basics, while the latter can be eliminated out of the equation if your budget does not comply.

Switching Jobs Can Affect Your Home Loan Prospects

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Home Mortgage BasicsIf you’re about to switch jobs while you have a home loan application in progress, have no fear as long as you keep your lender informed. Be straightforward with your lender about change of jobs or pay structures and are able to submit relevant paperwork, then you will likely still be eligible for a mortgage.

Always The Fair Weather Friend

The reason lenders are wary about changing jobs is simply because they are unsure about an individual’s future income based on their current income. Another reason is that borrowers who switch jobs often don’t have enough paperwork to vouch for their financial stability.

The types of borrowers that are considered high risk to lenders include borrowers who don’t have consistent work histories, who have changed their pay structure, such as from salary to commission and those who’ve changed careers.

Don’t let this discourage you and have you continue to rent a home, because fact is that buying a home is considerably cheaper than renting, about 35 to 38 percent cheaper. So instead of putting your home buying dreams on hold, why not explore your options so here are a few to get on the right track.

Keep Your Lenders Informed On New Job Prospects

If you’re expecting a job change, while your mortgage is being processed, keep your lender in the loop so that they can work with you to guide you on the right track. As you settle into your new job, keep your lender posted by sending in any relevant documents with regards to your new job.

When you sign a new job offer, send that into your lender and even when you receive your new compensation package. You will have to keep your lender informed on any changes as you get closer to the settlement so the sooner you do it, the better and easier it is.

Speed Up Your Paperwork Preparation

While it is important to keep your paperwork in order, it is especially important if you’re going through income and job changes. Income proof is the most important piece of paper work for lenders so it is important that you keep those first pay stubs safe and handy in order to continue to meet your lender’s requirements.

Getting Your Employer’s Recommendation

Along with getting a recommendation letter from your previous employer, it is highly recommended that you seek one from your new employer as well. Getting a letter from your existing employer proves particularly useful if you switch from a salary based pay to a commission based position.

Your lenders will feel more comfortable knowing that your boss works in the same structure and you still draw healthy paychecks. This current employer recommendation letter can also include the fact that your employer expects you to stick around for a while.

 

Hot Tips Sell Home Cool Winter Months

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Home Selling TipsYou may not want to list your home for sale in the winter, but sometimes you don’t have a choice. Knowing how to best showcase your home in the winter months can have a ton of advantages, when temperatures drop and the traditional rules do not apply.

Contrarily if you were selling your home during the spring or summer, it would be much easier to address any issues particularly cosmetic problems during the staging process. But selling your home in the winter months requires the same attention to detail so here are a few tips to get started.

Maintain The Curb Appeal

Curb appeal may not be the same as in the summer or spring months, but the same basic principles apply. Things that you need to take care off with regards to curb appeal are cleaning walkways and driveways and making sure the exterior is tidy.

With regards to the interior, the carpets and rugs should be kept clean and your home should be clutter free, which you can do by removing the photographs and knickknacks and photographs.

Focus On The Light

It is important to make your home feel both welcoming and warm, and the best way to do this is to emphasize light into it. Things to consider doing are removing window treatments to allow the light to shine in at its full might, and even opening the remaining draperies and blinds especially during daylight viewing.

If you’re showing your home during evening hours, bring in things such as table lamps and floor lamps, which can exude a comforting and warm glow all through your rooms.

Emphasize On Winterized Features

After your home passes the initial charm test, emphasizing on the smart winter features of your home can often help seal the deal. Your home may be more appealing to winter homebuyers if it were equipped with things such as an enclosed garage, new heater and HVAC components, and energy efficient upgrades or even skylights.

Winter buyers are more than likely to buy a home and move in the winter season as well so they will want to be confident that their new home is well prepared for the months ahead.

Show All Seasons

Even though you will be listing and showing your home in the winter season, it is a good idea to take photos of your home in other seasons as well. These photos can be added to the photo album of your home, and can even be included with your listing.

Regardless of how you choose to showcase your home during winter or any other season, be sure not to go overboard on your budget. The last thing you want to do is damage your credit just before moving day.

Postcards from Your Home Buying Journey

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Home Purchase BasicsBuying a home is definitely an emotional journey, one that is filled with choices and compromises, lows and highs. If you’ve gone through it, you should be well aware of the surprises, infatuation, horror and craziness. But if you haven’t gone through this route, you will definitely understand the point here once you do! So here are some postcards from the home buying journey starting from the home search right until moving day.

Starting Your Home Search

Sometimes when you walk into an open house, you may stop and wonder how some people have such weird taste. But while searching for a home, you need to keep in mind that some flaws are only minor and can be fixed such as shag carpets and peeling wallpaper. So it is best not to lose hope and remember that the peeling paint is your best friend.

Finding The Neighborhood You Desire

When you buy a home, you are indirectly committing to living in that neighborhood as well. So you not only need to ensure that the home is in tip top shape, but if the neighborhood lives up to your expectations as well. For example, if you have kids, you may want to ensure that there are good schools in the neighborhood, and regardless of whether you live with a family or alone, you will want check out the crime rates as well.

Needs Versus Wants – Let Your Budget Speak

A pool and four fireplaces may be something you always desired, but as your budget dictates, money for these items tends to draw the line. So it’s time to get creative, think ahead and be clear on priorities, because kids might start small, but often come with a lot of expenses as they grow.

Inspections Appraisals And Closing Costs

You’ve been working around the clock for the past few months just to save up for a healthy down payment, and you’ve even secured your mortgage, but don’t forget about those closing costs. Closing costs can be expensive so it is best to add them to your budget when shopping for a house.

Sealing The Deal And Making The Offer

The most nerve wracking moment would have to be taking the plunge and making an offer, which is probably also one of the most exciting and biggest financial decisions you can make in your lifetime. Then you just have to wait for approval from the seller and once you get the green light, you’re no longer a home seeker but a home owner!

Moving Day

When you move into your new home, you may notice the lights flickering, paint peeling and even some beeping noises, but if you want to make the house your own home, you will have to fix these issues in order to put your own stamp on the house.

8 Questions For Second Home Buyers

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Second Home / Investment Home BasicsBuying a second home is truly one of the most important and exciting investments you can make in your lifetime, but this decision also brings along with it a few unique considerations. Millions of people invest in a second home for several reasons such as to use a vacation home, which they can rent our when they’re not there. But there are several financial aspects to consider before you sign the deal for that house by the lake. So here are a few questions to ask yourself in order to make the right choice.

The Cost Of A Second Home

The sale price is not the only cost associated with buying a second home, but there are other expenses to consider as well. So regardless if the vacation home is big or small, you still need to factor in other expenses into the equation such as maintenance fees, utilities, property taxes, mortgage and some of these may be slightly higher than you’d expect them to be. Add to this, when you do not live at the second home, you are not able to take care of regular maintenance, which could turn small problems into much bigger and expensive problems.

A good rule of thumb to consider is to set aside roughly 1 percent of the homes purchase price for annual maintenance costs. So for example if you bought a home for $200,000, it is wise to set aside approximately $2000 in annual maintenance costs such as replacing a new furnace or emergency plumbing. If however, it is an older home you’re looking to purchase, then consider increasing the annual maintenance costs from 1 to 2 percent in light that older homes present more problems when compared to older ones. Also keep in mind that insurance premiums are generally higher for vacation homes because they are considered high risk by insurance companies as you will not be living there.

Can You Really Afford A Second Home?

Buying a second home is not a great way to spend your vacation time, but is rather a money decision, which should not be made until all your other financial commitments are in good order. Some questions to ask yourself with regards to this aspect are if you’re debt free, have you saved any money for retirement and if you can easily afford the closing down payment and closing costs of a second home.

Adding to this and in light that mortgage rules aren’t as stringent as they used to be a few years ago, lenders will carefully peruse your debt-to-income-ratio, which is the amount of money you can afford to payout after your monthly debts such as car loans, student loans, etc.

The Reason To Buy A Second Home

Many people who buy a vacation home consider it to be costs savings tool, where they save on lodging fees that they pay when they make their monthly/annual trips. But if you really think about it, for the amount of money that you’ll be shelling out on a vacation second home such as mortgage payment and insurance costs, you’ll be able to take a lot of nice trips each year and more frequently. Another perspective is to view the second home as a place where you plan to retire or even as a home that you sell down the line if the property appreciates in value that is.

How Are You Going To Use The Home?

Two important questions to ask yourself is if you’re going to be renting out your second home at any point to help cover some associated costs or are you buying it exclusively for yourself to live there. If you’re buying a second home for your own personal use, then you can choose a home that you like, but if you’re investing in a second home with the intention to attract tenants, then you have to consider several other aspects that attract tenants such as the home’s location.

Is It The Right Property If You Do Rent The Home?

If you’re planning to rent the property exclusively, then you may want to consider what a person might desire in a vacation home. Consider things such as its distance from tourist hotspots, the beach, etc.

Will You Need The Services Of A Property Manager?

If you’re willing to overlook all the maintenance costs of the home and all though the year, then skip this question. But if you need to hire a property manager to do the legwork for you, then factor in their fees as well.

Where Is The Home Located?

Consider the location of the second home before making an investment because buying one near the beach is far better than buying one in a region that regularly attracts wildfires.

Are You Making A Rash Decision?

Finally and just like any large purchase, you should make sure that you’re not making an impulse and emotional decision. The key is to do extensive research on if the second home is right for you and if so its purpose and location.

The 7 Rules Of Interior Design

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Interior Decoration BasicsHave you ever wondered what makes a room more appealing and beautiful? Is it original artwork or an abundance of light? Or is it expensive furniture and curtains? The answer is none of the above, but there is one single magical formula that can define the beauty of a room.

Even a professional interior designer has to start from the basics and work his/her way up to creating the perfect ambience. The key to a beautiful living space is not about spending truckloads of money on lavish furniture, but ensuring everything in the space works hand in hand. That said, here are a few tips to creating the perfect space, from where to begin to what to avoid.

Make Sure The Corners Are Soft

Tables, rugs, chairs, photo frames and other such things in a home generally have 90-degree angles. And one of the ways according to experts to make the room visually appealing is to mix in things with rounded edges to avoid an elevation of sharp corners in the room. For example, if you have a rectangular coffee table, throw in a round rug to enhance the décor.

Don’t Splurge If You Can’t Afford To

For those on a budget, it is especially important not to rush in to things when shopping for home décor. Although, it may be tempting to complete an entire home all at once, it is important to take it from room to room. The big question when shopping for interior decor is how to know if something is a perfect fit. Well, the two questions to ask yourself are does it make you happy and is it practical and functional as it was designed to be?

Avoid Buying Sets

Although buying sets of furniture is extremely tempting, avoid doing it. Instead, look for organic and blended pieces of furniture and other things that work together. Although, all the furniture in your home should match up in some way or the other with other furniture, it shouldn’t be exactly the same.

Don’t Go Overboard With The Theme

There are several homeowners who prefer a certain look and feel for a specific room, but tend to go overboard with the theme. Although it’s great to have a nautical design in a room, but things start to look strange when you bring in porthole mirrors and rope knot pillows.

Choose White Wisely

If you’re going to use white, you have to use the perfect shade of white considering that there literally millions of shades of white available. But how do you determine the perfect white for your living space? There are several ways to do this, but the best way is to simply paint a small board with the shade of white you prefer, and then move it around from room to room and see if it matches up.

Don’t Ruin The Architecture

It’s great if you have amazing moldings, but painting the walls a contrasting color in an effort to highlight the frames around the doors and windows is another. But in the end what you do with your home is entirely up to you.

More Home Selling Mistakes

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selling-home-mistakesHome prices are again on the rise, with reports of an eight percent hike, nationally. The homes that were affected by the housing downturn are now worth significantly more than the amount owed on them. This is excellent news for homeowners looking to sell their homes, but just because it is a seller’s market, don’t be careless and overconfident with your own property. Here are a few more home selling mistakes to avoid:

Selling Your House On Your Own

Trying to take on the home selling process or for sale by owner is craziness. Many homeowners are tempted to take this route for several reasons, but mainly to save on the commission. But apart from saving on agent commission fees, you need to know how to sell a home and the expertise of a professional real estate agent. Can you provide valuable neighborhood advice? Scour through tons of paperwork? Negotiate on your behalf? If you answered no to any of the above questions, then for sale by owner is not your cup of tea.

Using Bad Quality Photos

Fact is that more than 85% of home seekers begin their home search online, and if you have lousy photos to showcase your home, this can definitely be detrimental to the sale of your home. The key is to showcase your home on its best day, and not have your real estate agent take a few photos with their mobile camera to use in your online listings. Photos are an integral part of your online listing so consider taking photos when your home is clutter free, and when there’s enough light shining through.

Mispricing Your Home

One of the biggest mistakes you can make when listing your home for sale is overpricing it. Even though the market may be hot, overpricing your home will result in a stale listing that sits in the market for weeks, maybe months. It is best to know your competition and set the right price, and avoid overpricing it in the hopes that it will eventually sell.

Avoiding Or Refusing To Make Repairs Before The Sale

This one is plain and simple. If you don’t take care of minor repairs to your home, you will lose money. Showing your home when there are faucet leaks, an irreparable water heater or water stains on the ceiling will definitely turn off potential home buyers.

Keeping All Your Junk And Clutter

If you think buyers are just going to overlook your cookie jars and stacks of boxes, then think again. Fact is that clutter makes your home seem smaller so it is best to de-clutter much before you list your home for sale.

Neglecting The Backyard

It’s a proven fact that the front curb appeal can dramatically change the look of the exterior of a home, but what about the backyard? Your backyard is not just for storing bikes or rusty old barbeques, but should be given equal attention as the front of the home. You may neglect your backyard by letting it go, but for some homebuyers it might just be the most important part of the house.

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