How To Dispute Errors On Your Credit Report

One of the biggest obstacles standing between you and that house or condo you want to buy may be your credit worthiness.

And, who is it that tells your lender whether or not you are worthy of getting a mortgage? Credit reporting bureaus — known collectively as “The Big 3” (Experian, Trans Union and Equifax), are the first to investigate how risky lending money to you may be.

Let’s take a look at how the determination is made and, more important, why you should be diligent in checking for mistakes made along the way.

The Big 3

Whenever you borrow money, whether it’s for a major purchase such as a car or home or with revolving credit, such as a charge card, the lender will report your repayment history to the Big 3.

But that’s just the beginning. These agencies also receive information about you from debt collectors and they purchase information from public records, such as tax liens, judgments and bankruptcies.

Most, but not all creditors report to all three agencies. Some don’t report to any.

How They Determine Your Credit Worthiness

Each of the three agencies “has its own model for evaluating the information in your credit report and assigning you a credit score,” according to the experts at Equifax. This is why your score may be different with each agency.

A big chunk of your credit score is determined by the types of credit accounts you have and how many you have.

Equifax, for example, bases 15 percent of its determination on these factors.

Payment history, however, is the most important factor.

The Big 3 Are Only Part Of The Story

The three credit reporting agencies report to credit scoring companies, such as FICO®, short for Fair Isaac Corporation. About 90 percent of lenders in the country use a borrower’s FICO® Score when determining whether or not to approve a loan.

FICO® examines each credit report, looking for the following:

  • Payment history – accounts for 35 percent of the credit score
  • Amount of money owed – makes up 30 percent of the credit score
  • Length of credit history – 15 percent of the credit score
  • New credit and credit mix – each make up 10 percent of the borrower’s credit score

The company then assigns you a credit risk score, from 300 (considered poor) to 850. Borrowers with credit scores of 740 or higher qualifiy for the lowest mortgage interest rates from the majority of lenders.

Those with scores lower than 620 will find it challenging to obtain a loan and, if they do manage to get approved, will typically pay much higher interest rates.

Everybody Makes Mistakes

Your credit score is only as good as the information supplied to the credit reporting agencies. And, errors are common.

“As many as 42 million Americans have errors on their credit reports,” according to CNN Money

Some of these mistakes are egregious enough to ding the consumers’ credit scores. When you’re getting your finances in order to go after that loan preapproval letter, check your credit reports (from all three agencies) carefully.

Some of the most common errors, according to the Federal Trade Commission, include:

  • Identity information – Ensure that your name, address and social security number are accurate. “Mixed files,” those that contain information from two consumers with similar names, are common.
  • Accounts – Check each account to ensure that it is truly yours. Identity theft is another common reason for errors in a credit report.
  • Status – Check that the status of each account (open or closed) is listed correctly.
  • Delinquent accounts – Verify that an account listed as delinquent is actually delinquent.
  • Dates – Each account should list when the account was opened, closed and the date of the last payment. Ensure these dates are correct.
  • Double entries – Dispute any debt that is listed more than once, even if they have different account names or different creditor names.
  • Corrected information – If you’ve received a correction to a previous dispute, ensure that the information in the current report remains corrected.
  • Balances and limits – Check all the outstanding balances and credit limits to ensure they’re correct.

How To Correct Errors In Your Credit Reports

Each credit report includes information on how to dispute information contained in it.

  • Equifax – handles all their disputes online. Learn more, here.
  • Equifax – they, too, handle all disputes online. Go to equifax.com to get the details.
  • TransUnion – dispute your credit report online, by mail or phone.

The dispute process takes time, so start it as soon as you’ve decided to purchase a home.

Relocation: How To Buy A Home When You Don’t Know The Area

Conflicted: It’s the perfect description of how homeowners feel when faced with the reality of relocating from one city to another. It’s both exciting and mind-numbing, frightening yet courageous and it brings up feelings of both melancholy and elation.

Moving from one home to another is a life-disrupter, but moving from one town to another is a major upheaval. Watching that moving van drive down the street, fearful that it’s the last time you’ll see your belongings, is just one of the moments of angst you’ll face when relocating.

Between then and now you’ll need to find a real estate agent and a neighborhood and, finally, a home – all in a town that may be thousands of miles away.

Relocating doesn’t have to be a ghastly process. Let’s make a plan and get you into your new town, neighborhood and home, without many of the hassles.

Your Ideal Home

Knowing exactly what type of home you want is the first step in your relocation process. From single-family to multi-family homes to condos and townhomes, get clear on exactly what you want.

Then, decide on how much room you need – both in living space and the number of bedrooms and bathrooms.

And, don’t forget the exterior. With a condo, you may not have much of a choice about outdoor areas, but if you’re in the market for other home styles, determine what you require outdoors.

  • Do you need a garage? If so, how big?
  • Is a backyard important?
  • Do you need outbuildings?
  • Is a swimming pool on your wish list?
  • If you garden, how important is an existing irrigation system?

Choosing Your New Neighborhood

Your preferred home style may help narrow down your choice of neighborhoods. For instance, depending on what city you’re headed to, condos may only be available downtown.

If you’re in the market for a luxury home, you may find them only in certain parts of town. If you’re bringing the horses, the boat or the golf clubs and cart – all will help you choose a suitable neighborhood.

In general, however, you’ll need to answer some questions to figure out where you want to live:

  • What is your priority? Is it a quick commute to work, being located in a quality school district, close to public transportation or recreational amenities?
  • Do you crave urban living or are the suburbs more to your taste? Rural living has a lot to offer as well.
  • Do you love the sound of kids playing outside our window or does it grate on your nerves?

Research Is Your Friend

If you don’t know yet how much you can afford to spend on your new home in your new city, please see a lender.

When you have a handle on your budget you’ll find the homebuying process immensely more manageable.

But, you must also take into account that the cost of living where you are now may not look at all like the cost of living in your new hometown.

  • How much do groceries cost in the new town? A gallon of milk in New York City, for instance, is $4.20. You can buy that same milk in Phoenix, AZ for $2.20, according to a AOL.com’s Emily Rella.
  • Utilities? One of the things that most shocks Las Vegas homebuyers is the cost of utilities. It’s not at all unusual to have a $300 monthly power bill in summer from the Buffet-owned NV Energy.

To get a handle on your future costs, navigate online to a cost-of-living comparison calculator, such as this one at CNN Money or one with more detailed results at Bankrate.com.

Let’s Find A Neighborhood

Now you have an idea of how much you can afford to pay for a mortgage every month so it’s time to check out what’s available in your affordability range.

If you’re moving for a new job, go to a Google map of the area surrounding your new workplace and find the neighborhoods with a tolerable commute. Then, do some research on each one.

A good place to start is City-Data – the folks who hang out in the forums there have lots of good information.

Let’s assume you’re moving to Minnesota’s Twin Cities and you want to live within 30 minutes of your new job, which is in Minneapolis. You’ve checked out a Google map of the area and determined that Edina, Maple Grove and Excelsior look like cool towns to explore.

With your list of must-haves in a home in hand, navigate to City-Data and click on “Minnesota.”

You’ll be taken to a new page with a list of cities. Let’s click on “Edina.” The new page is full of information about the city but, if you scroll down the page, you’ll find a listing of the latest posts in the Edina forum.

This is where you’ll find the nuggets of wisdom that will help you decide whether or not it’s the city for you.

It’s Time To Get Help

That help will come in the form of a real estate agent. If you are selling a home in your current city, ask your listing agent for a referral to an agent in your new city.

If you won’t be selling, ask friends, family and colleagues for a referral to a local agent who will then help you find one in the new town.

One final tip:

Don’t rely on the information about homes that you find on the big real estate portal sites because much of it is unreliable.

Although they would like you to think that they have all of the active listings in any given area, they don’t.

The only accurate listing of homes available is in a region’s Multiple Listing Service database, which can only be accessed by licensed real estate agents.

Frightmare On Your Street – Horror Movies, Real Estate-Style

Skip the corn mazes and haunted hayrides this Halloween and indulge in haunted-house pleasure in your own living room. In fact, if you work your way through our series of real estate-related Halloween flicks, you’ll think of them every time you view a home for sale, or put yours on the market.

Now, some of these are serious thrillers while others include a dose of humor, but all are worth a watch. So, cook up some spooky eats, invite your closest friends and binge on this October real estate fright-fest.

The Selling”

A small-budget film, “The Selling” offers a combination of horror, suspense and slapstick humor, mostly the latter.

The story follows Richard, an honest, hard-working real estate agent and his business partner Dave, who are duped into listing a home that later turns out to be haunted. But, that’s not all. As one reviewer put it:

“How do you sell a house full of ghosts in this economy without telling anyone that the house was once owned by a famous, though unconvicted serial killer?”

Especially, we might add, when the agents have to compromise with ghosts over showings of the home to potential buyers.

Funnier than it is scary, even horror fans love this movie. Not rated, you can rent “The Selling” at amazon.com, vudu.com and iTunes.

“The Conjuring”

A horror film that gained its R rating not for nudity, gore or naughty words (because there aren’t any), but by its scare factor alone.

Released in 2013, “The Conjuring” follows two paranormal investigators who try to help a family who is at the mercy of whatever is haunting their farmhouse.

Haunted real estate – maybe someone should specialize in that?

One of the highest-rated horror movies at amazon.com, you can rent it there, at Google Play, vudu.com or use your HBO Go subscription.

“Tucker & Dale vs. Evil”

This one is for the squeamish among your fright-fest audience. Billed as a comedy/horror film, it takes the top spot among the genre’s offerings at Netflix.

Tucker and Dale head to their backwoods mountain hangout for a few days of beer drinking and fishing and meet up with a group of college kids.

Location, location, location isn’t just paramount in real estate, but a central theme in the characters’ hilarious – and deadly – assumptions.

Released in 2010, the film is rated R. Rent it amazon.com, vudu.com, Google Play and iTunes.

“The People Under The Stairs”

We’ve seen some crazy things in homes, but never anything like what’s in Wes Craven’s mansion-turned-chamber of horrors.

LA Weekly calls it a “gentrification fable,” an allegory for the “ongoing war between property renters and property owners.”

Craven says the house came to him in a dream – a house with an unassuming exterior whose real truth is revealed inside.

Released in 1991, and rated R for the violence, you can rent it at amazon.com, vudu.com, Google Play and iTunes.

“Hausu”

If you’re a fan of foreign films and/or really weird stuff, “Hausu” (Japanese for “house”) is a Japanese film, released in 1976.

Seven girls on a summer trip pay a visit to a possessed house filled with furniture that eats them in bizarre ways. Watch the film carefully as there’s a message behind the campiness.

By the way, It’s titled “House” at amazon.com and you can also rent it at vudu.com and iTunes.

“Drag Me To Hell”

This one is especially good for those homeowners who’ve had the misfortune of being forced into foreclosure.

A young loan officer turns down an elderly homeowner’s request for a mortgage payment extension and lives to regret it.

Yes, it’s a bit gory at times, but it’s also surprisingly funny at others. Rated PG13, rent it at amazon.com, vudu.com, Google Play and iTunes.

“The Ladies Of The House”

The first thing you need to know about this ““grindhouse-style feminist horror” film is that the kids should be safely tucked into bed when you watch it.

Although it’s not rated, trust us – you don’t want the little ones watching it.

The characters include strippers and three guys out for a good time. Nudity? Yes. Sexual content? Mhm. Gore? It’s a horror film, so yes.

In fact, one reviewer calls the most gruesome aspects of the film “unsavory torture porn scenes.”

But, we had to include it because, first, horror fans rave about it and, second, the house (specifically its interior) is a central character in the film.

In a nutshell, three guys on a birthday outing end up back at one the seemingly normal, nondescript home of several strippers who also happen to be cannibals.

Rent “The Ladies of the House” at amazon.com, vudu.com, Google Play and iTunes.

The Fall Garden: What To Do Now

So, how was your garden this year? If it didn’t perform as you’d hoped it would, we have good news for you: Fall is the perfect time to ensure that next year’s spring garden is a winner.

From soil fixes to curing diseases and dealing with garden pests, tasks you perform now are well worth the time and energy spent.

Clean It Up

Sure, you can run around the garden yanking out dead plants as they pass into the afterlife, but why? Just wait until they all die off and then perform a mass “yank.”

Since garden detritus provides safe havens for over-wintering disease organisms and pests, bag up the dead plants or throw them into the compost bin.

Then, clean up the soil by removing dead leaves, twigs and anything else that will provide shelter for pests.

Attend To The Soil

Fall is the ideal time to prepare your vegetable and other garden soil for next season’s garden.

A 4-inch layer of shredded bark, combined with an equal amount of compost, dug into the top 6 inches of soil and left to overwinter will lighten up clay soil.

For even better results, add an additional 4-inch layer of wood chips to the surface of the soil and allow it to remain all winter.

Give other soil types a shot of compost spread over the surface. By spring, Mother Nature will have mixed it into the soil.

All vegetable gardens can use a bit of ammonium sulfate. The experts at Colorado State University Extension suggest adding about two and one-half pounds per 1,000 square feet of garden space, mixed into the soil to about 10 to 12 inches deep.

Take Care Of The Workhorses

Sure, it sounds trite, but perennials truly are the workhorses of the garden and they’ll work even harder for you next season if you pamper them now. Any that require cutting back should get the treatment now (don’t forget to remove the debris to keep pests and disease organisms away).

Inspect shrubs for any branches or stems that may be diseased, prune them off and then rake up the mulch under the plant (it may contain disease organisms or spores).

Then, as we get closer to winter, spread a 4- to 6-inch layer of fresh mulch (such as leaves or pine needles) over the soil.

And The Bulbs

If you want spring blooms from crocus, daffodils, or tulips, now through the fall (before the ground freezes) is the time to plant them.

The gardening gurus at Better Homes & Gardens suggest that you plant each bulb in a hole that is “two to three times deeper than the bulb is tall. So, if you have a 3-inch-tall bulb, dig a hole 6 to 9 inches deep.”

Tender bulbs, such as canna, dahlia and gladiolus should be protected from being brought to the surface by frost heave during winter. Use pine tree boughs, wood chips or pine bark, according to the experts at Better Homes and Gardens.

Don’t Forget The Trees

Get young trees ready for winter by using tree guards, wrapped around the trunk. This helps keep hungry critters from chewing on the bark.

Prune any branches that don’t look like they’ll stand up to winter weather and any that are crossing over one another (they may be wounded or break when they rub together during windy weather).

Continuing watering your evergreen trees right up until the first frost to protect the foliage from drying out.

That Luscious Lawn

Just because summer is over doesn’t mean your lawn doesn’t require attention. In fact, fall is the season when grass is working its hardest, taking in as much water and nutrients as possible to prepare for the dormant season.

Keep mowing and watering the lawn throughout autumn and, as winter approaches, cut it at the mowers lowest setting.

Don’t cut more than one-third of the lawn’s height in one mowing.

Fall is also the best time to aerate and fertilize the lawn. Use a broadcast or drop spreader to apply fertilizer evenly.

Finally, don’t allow fallen leaves to remain on the lawn over the winter. If you do, they may suffocate the grass or, according to Popular Mechanics, provide the ideal breeding ground for fungal organisms.

Now all you need to do is stock up on seed catalogs and gardening books to read by the fire. Before you know it, gardening season will be back and your little plot of dirt will be ready.

 

2 Important Forms You’ll Need To Sign When You Sell Your Home

 

 

Like practitioners in any profession, real estate agents and brokers have a unique vocabulary, they usher their clients through a distinct process and provide industry-exclusive legal paperwork.

Because agents and brokers use the latter, daily, they are so familiar with it that many tend to forget that their clients are not. None of us want to appear clueless, so many real estate consumers keep quiet and don’t ask questions about things they don’t understand.

Today we’ve decided to fix that by introducing you to two of the most important forms that your listing agent will ask you to sign.

Agency Disclosure

The first thing to understand about “agency” is that it is a legal term that applies to a relationship in which one party is representing another in dealings with a third party.

When selling your home, your real estate agent is his or her broker’s agent – representing the broker in her dealings with you.

Your real estate agent will then represent you in your dealings with buyers. Confusing? Yes, a bit.

Think of the real estate agent as the middle-man or woman, standing in for the person who holds the broker’s license when dealing with you and representing you when dealing with the buyer.

One of the first forms you’ll be asked to sign (if not the first) is an agency disclosure.

It is “a written explanation, to be signed by a prospective buyer or seller, explaining to the client the role that the broker plays in the transaction,” according to “Barron’s Dictionary of Real Estate Terms.”

The disclosure form explains the various types of agency relationships in effect in your state.

The most common relationships are single agency (the broker represents only one party in the transaction), designated agency (when the buyer and seller are represented by two agents from the same brokerage) and dual agency (when one agent represents both the seller and the buyer, illegal in eight states).

The agency disclosure form is not a contract. When you sign it, you are merely acknowledging that the broker has disclosed the agency relationship.

Listing Agreement or Contract

This is typically the second form you’ll sign and it gives the broker and her agents the right to offer the home for sale. The listing agreement must contain the following if the broker is a member of the National Association of Realtors:

  • The price at which the home will be offered for sale.
  • A beginning and ending date.
  • The amount of broker compensation and the terms and conditions under which it will be paid.
  • Authorization for the broker to cooperate with other brokers and how the broker that brings in the buyer will be compensated.
  • Authorization for your broker to either reveal or not reveal the existence of previous offers.

Other items you may find in the purchase agreement include:

  • Authorization for the broker to install a sign and lockbox.
  • Items the seller wants excluded from and included in the sale.
  • Seller’s warranty that he or she owns the home and that there is no pending notice of default.
  • Authorization for the broker to advertise the home in the Multiple Listing Service database and/or online.

The listing agreement is a contract, so read and understand everything in it before signing.

 Another important piece of paperwork you’ll be asked to sign is the homeowner’s disclosure, which we’re happy to explain to you.

Selling your home is a paperwork-intensive undertaking, but nothing compares to the stack of papers you’ll be required to sign at closing. But, that’s a subject for another post.

3 Words You Must Learn And Understand Before You Buy A Home

When you’re shopping for homes you’ll be introduced to an entirely new vocabulary and I’ll be the first to agree with you that some of it seems downright boring. Take encroachments and easements, for instance.

Though they sound ho-hum, they are both important concepts so today I thought I’d try to put them in plain English for you.

What’s an encroachment?

Encroachment describes the violation of a homeowner’s property rights. Imagine your next-door neighbor, Frank, decides he is tired of having only a carport and builds a garage. When complete, the structure extends onto your property. This is encroachment.

Encroachment can be intentional or unintentional

And, typically, it’s the latter. Unless you are absolutely sure where your property lines are — down to the inch — you’ll have no way of knowing if you’re encroaching on your neighbor’s property when you decide to plant that gorgeous oleander hedge between the two homes.

And, an easement?

In Hawaii, all beaches are publicly-owned and the public is ensured access to all “land below the high-water mark on any coastal shoreline.”

In other words, should you purchase a home on a beach in our 50th state, you cannot block the public from using that beach. In Kahala (on Oahu) for instance, you’ll find pathways that cut between multi-million- dollar homes, from Kahala Avenue to the water.

These paths are public rights-of-ways, or easements — allowing others to travel or pass through their land. And the homeowners on either side have no say in the matter.

The primary distinction, then, between encroachments and easements, is one of permission.

How to deal with encroachment — and why you must

When an encroachment comes to light, both parties have options. Remember Frank – the neighbor who built his garage partially on your property? Suppose this happened decades before you figured out that he had encroached on your property.

You approach Frank, voicing your displeasure. Your most common options include ignoring the trespass, forcing the removal of the garage, offer Frank an easement or have him sign an encroachment agreement.

All of these remedies require the advice and assistance of an attorney

What if Frank doesn’t like any of these options? He may have one of his own (and you won’t like it): adverse possession.

Yes, another ho-hum real estate/legal term, but one that has a huge impact, if invoked. Through the adverse possession process, Frank may be able to gain ownership your portion of the land on which the garage sits.

In fact, adverse possession can be used to gain ownership of “just a few feet of property or hundreds of acres,” according to Emily Doskow, attorney and author of “Neighbor Law: Fences, Trees Boundaries & Noise.”

Although state laws vary, Doskow says that courts generally apply a “four-factor test” when looking at adverse possession claims. The occupation of the land must be:

  • hostile
  • actual
  • open and notorious
  • exclusive and continuous for a certain period of time

Courts don’t define “hostile” the way we do. In an adverse possession case, it describes that Frank’s possession of your land is hostile to your interests.

Then, the courts will want to see that Frank actually used your land as if he were the owner.

He can prove this, according to Doskow, if he can produce records showing he maintained or improved the property or paid taxes on it.

The third factor of the test is that Frank’s use of your property must be obvious “to anyone – including a property owner.”

Finally, Frank must prove that he controlled the land exclusively (meaning he didn’t share it with you) and that he did so for certain amount of time (which varies by state).

How to avoid adverse possession

When determining how to deal with encroachment, it’s important to keep Frank’s option in mind.

Your best option, in any type of encroachment, may be to either offer to rent the offender that piece of your property or grant him an easement.

But, it’s critical that you contact a real estate attorney who will help you consider all possible options. And do it quickly because there is a statute of limitations.

Fall Is Here! Time to get to those home maintenance chores

Fall fell on us on September 22 and if you haven’t yet begun your fall home maintenance tasks, it’s time to get started. And, to help, we’ve gathered some tips.

Smoke alarms save lives

Fall and winter see an increase in home fires, according to the American Red Cross, and faulty smoke alarms were to blame for more than 20 percent of home fire deaths. Sadly, nearly 40 percent of the deaths occurred in homes that didn’t have smoke alarms, according to the National Fire Protection Association (NFPA).

If you have smoke alarms in the home, now is the time to check that they’re working properly. Change the batteries if you can’t remember when they were last changed.

Also, ensure that you have enough smoke alarms in the home. They should be installed outside of each bedroom and on all levels of the home.

“If you and your family sleep with the doors closed, install smoke alarms inside sleeping areas, too,” suggests the NFPA.

NFPA also suggests the following:

  • Consider connecting your smoke alarms so that when one sounds, they all do.
  • Replace all smoke alarms when they are 10 years old
  • Use both ionization and photoelectric alarms throughout the home. The former detects flaming fires and the latter will warn you about smoldering fires.

Check the weather-stripping

Windows and doors are notoriously leaky, allowing our toasty indoor air out and that frosty stuff in. Not only is this tough on your utility bills but uncomfortable for the occupants of your home as well.

Weather-stripping is the way to stop the leaks, but it’s not something that lasts forever and periodically needs to be replaced.

Try rattling your windows. If you’re successful, you probably need to replace the weather-stripping.

If you can see daylight around the door frames you’ll need to strip there as well.

It’s an easy DIY project and Sal Vaglica of This Old House offers a handy walkthrough of how to choose the right product and you can get tips on installing weather stripping from the U.S. Department of Energy.

Yes, it’s a bit of a time-consuming task, but one well worth performing. Replacing worn-out weather-stripping can save 10 to 15 percent on your energy bills this winter, according to the U.S. Department of Energy.

Get a tune up

HVAC systems (heating, ventilation and air conditioning) last from 15 to 20 years, if properly maintained. Components within the system, however, have shorter life spans, according to the experts at ThisOldHouse.com. The heat pump, for instance will die at around 16 years after installation.

Since we’re entering into that time of year when our heating systems will start getting heavy use, call in a professional to inspect yours.

If you have an oil heating system, inspect the entire system – tank, line, pipes, fittings and valves – for leaks. for leaks. The Massachusetts Environmental and Energy Affairs department claims that the cost of cleaning up a heating oil leak averages between $20,000 and $50,000.

Have your oil company service the furnace and replace any damaged parts.

Forced air systems require seasonal maintenance as well. At the very least, stock up on filters and change them monthly during fall and winter.

Don’t forget the home’s exterior

Step outside and inspect the exterior home from top to bottom.

  • Check the gutters and if they’re clogged, clean them out and then check for leaks. Ensure that the downspouts are still directing water away from the home.
  • If you have siding, check to see if it needs caulking.
  • Check the siding and caulk it, if needed. Also check the exterior corners, where two walls meet. Caulk there as well, if needed. For answers to questions about what should and should not be caulked, head to com and read their guide.
  • If you’ve been putting off blowing out the irrigation system, consider doing it soon and then wrap the pipes.
  • Check trees around the house and trim back any branches that might break during heavy winds.

Of course, there’s lots more you can add to your fall honey-do list, but these tasks will get you started and ensure that your home is safe and sealed from the elements.

Scary Home Inspection Report? It Doesn’t Have To Be A Deal Breaker

It’s a toss-up whether the home inspection or the appraisal induces more nail-biting. Homebuyers, sellers and the agents involved await the results of both with a mixture of anticipation and fear. The latter, at least statistically, is unfounded.

“Nationally, [only] 3.9 percent of sales failed in 2016,” according to Forbes staff writer Samantha Sharf.

She doesn’t mention the reason for the failures, although it’s a safe bet that not all of them were due to a nasty home inspection report. So, the chances are in your favor that your deal, regardless of the findings of the inspector, will sail through to closing.

But, it may need your help.

When faced with problems that the home inspector turns up, you, as the buyer, have several options.

First, Choose Your Battles

Understand that there are some repairs, such as electrical, roof, the HVAC system and plumbing, that you can reasonably expect the seller to make.

In fact, anything that presents a health and safety concern or that negatively impacts your use of the home is not only something that the lender may require, but that, should you walk away from the purchase, the next buyer will expect as well.

It’s the little things, though, that bog down transactions, sometimes bringing them to a halt. If you really want the home, ignore the small stuff and fight for what actually matters.

Items to ignore include anything of a cosmetic nature and problems that are inexpensive to remedy. Save your big guns for the major repairs.

For instance,

Demand repairs to anything that presents a danger to health and safety, such as faulty wiring or mold.

You Have Options When Faced With An Ugly Home Inspection Report

Ask the seller to make the repairs

When faced with major repair or replacement costs, many homebuyers ask the seller to make the repairs before the close of escrow. Often, sellers balk at the request, but once they’re reminded that the next potential buyer will most likely make the same request, they relent.

Ask the seller for a credit

Rather than ask the seller to make the repairs, ask that he or she credit you with the cost of the repairs at the close of escrow. This way, the seller avoids the hassle of having to hire a contractor and the inconvenience of home repair work happening while he’s trying to pack up for the move.

Note that FHA will only allow the seller to credit the buyer 6 percent of the sales price.

But, if the problem has to do with the roof and the required repairs are extensive, FHA may require that the work be done before the close of escrow.

Renegotiate the price

A third option is to ask your agent to amend the purchase agreement with a reduced price, reflecting the deduction for the cost of the repairs. You’ll need to get bids from contractors to determine the cost of fixing or replacing whatever is at issue.

This option depends on your current cash flow. While it lowers the cost of the home, it does nothing to put money in your pocket. So, before exercising this option, determine if you have the funds to do the work.

Switch your financing

If you’re using a FHA-backed loan, contact your lender to find out if you can switch to their 203k program. Because this loan rolls the cost of the repairs into the mortgage, you’ll, in essence, be financing the repairs but only make one payment every month.

The 203k program is a bit complicated and the loan takes time. It will significantly slow down the purchase process so you’ll also need to ask the seller for a later closing date.

One problem you may run up against with this option is that the seller is under no obligation to cooperate with your efforts to obtain financing that differs from that stated in the purchase agreement. There is a risk that the seller may cancel the sale.

But, since whatever problems the inspection turned up are now disclosure items (the seller will have to inform any subsequent buyer about them), many sellers will be amenable to the change.

It’s important to work closely with your real estate agent on inspection problems, requests and remedies.

What Does A Title Company Do?

Whether it’s your first time buying or selling a home, one of the most confusing aspects of either process is learning the lingo. Fixtures, encumbrances, contingencies – real estate jargon starts flying fast and furiously.

The various players in the process, their roles and responsibilities, seem to confuse consumers the most and the title company sits at numero uno.

In property law, Black’s Law Dictionary defines title as “. . . the means whereby the owner of lands has the just possession of his property.” So, how does one determine who has “just possession” of a particular piece of property and, thus, the right to sell it?

The title company – but that’s not all it does. Let’s take a look at a title company’s three primary roles.

Researching The Home’s Title

Shortly after the ink dries on a contract to purchase a home, it’s delivered to the chosen title company where it will be assigned to a closing agent. Since the contract is also considered escrow instructions, this agent is tasked with following it to the letter.

Then, the research begins and the first step is a thorough examination of any public records pertaining to the property. These include, but aren’t limited to:

  • Mortgage records
  • Probate court records
  • Divorce records
  • Liens
  • Wills
  • Sewer assessments
  • Levies
  • Tax records

For instance, Jeff was trying to sell his deceased mother’s home which was sitting on foreclosure’s doorstep. He received a reprieve from the bank – he had 90 days to sell the home or they would begin foreclosure proceedings.

During the escrow period, the bank’s lien, placed while Jeff’s mother was still living, came up and the transaction came to a halt until the bank submitted a release of the lien.

Some of the issues that a title search turns up are trivial but larger issues need to be cleared before the transaction can proceed.

Issues A Preliminary Title Report

The title company then issues a preliminary title report. Because it lists information about the home that no other document does, it’s one of the most important documents a buyer will receive.

For instance, the preliminary report (known as the “prelim” in the industry) lists the home’s legal description:

“Southwest quarter of Southwest quarter (SW ¼ of SW ¼) and West Half of Southeast quarter of Southwest quarter (W½ SE¼ SW¼) of Section Eleven (11), Township Four (4) North of Range Eight (8) West, containing sixty (60) acres of land, more or less, together with the residence, garage, barns and garden,” and so on and so forth, courtesy of The Louisiana Office of the Lieutenant Governor.

Yet another example of real-estate-as-a-second-language, but it’s important information so hang on to that report after the transaction is complete.

The report also lists everything it turned up in its research, including liens, encumbrances and other title defects. These are typically listed as items that will be excluded from the title insurance coverage unless they are corrected.

Consider the preliminary title report as an offer to insure, not a complete history of the property.

Issues The Title Insurance Policy

Title research may not turn up all issues with the property’s title, so title insurance policies protect against any future claims against the property for events that happened in the past.

Bratley, holds title to his grandmother Mable’s home as tenants in common. In 2005, Mable was admitted to a long-term care facility. The following year, Bratley sold gramma’s house, forging Mable’s signature on a full-authority power of attorney. He even had it notarized.

When the home sold, Bratley not only signed the closing documents on behalf of himself and Mable, but authorized that the proceeds from the sale be wired to his personal account.

Three years later, Mable passed away, leaving the executor of her will to settle her estate. In so doing, the homeowners who bought Mable’s home were served with a lawsuit, laying claim to Mabel’s heirs’ interest in the property.

Thankfully, they had purchased an owner’s title insurance policy, even though it’s not mandatory to do so.

If you’ll be getting a loan to buy a home, lender’s title insurance, on the other hand, is mandatory. Since the home is the loan’s security, lenders use all avenues available to protect their interest in the property.

Both policies require only one payment, at closing, and the policies are in force for the life of the loan (for the lender’s policy) and for as long as you own the home, in the case of the owner’s policy.

The National Association of Realtors pegs the average cost of a title insurance policy at $1,000, but cautions that the price will vary, depending on region and the price of the home.

 

Stage Your Kitchen To Sell

You don’t have to be an impeccable housekeeper when selling a home – you just need to look like one. That’s the beauty of staging a home for sale – it gives buyers the perception of “impeccable,” and perceptions sell.

In fact, staging has been shown to increase a home’s perceived value. “A consumer’s perceived value of a good or service affects the price he is willing to pay,” claim the experts at Investopedia.

Since the kitchen is the most popular room in a home, at least according to homebuyers, paying special attention to how it’s staged should be your first step when thinking about getting your home ready for the market.

Declutter

Your kitchen is now a product, and like any product, you’ll need to ensure that it’s sale-ready. Just as you wouldn’t dream of selling a car that’s cluttered with kids’ stuff, fast food wrappers and paperwork, neither should you tolerate everyday living-type clutter in the kitchen.

  • Clear off the top of the refrigerator, leaving only one decorative item, then remove all the fridge magnets and the photos, report cards and child artwork they hold.
  • Clear off the countertops completely, putting small appliances out of sight and displaying just a few decorative items.
  • If there’s a pot rack in the kitchen, consider removing it. Buyers want storage space and they’ll feel your kitchen lacks it if you need a pot rack.
  • If your kitchen trash receptacle isn’t hidden away, consider buying one that will fit in the pantry or a cupboard. An exposed trash container broadcasts to potential buyers that there isn’t enough cupboard space in the kitchen.
  • Most of us tend to collect clutter near the kitchen sink – bottles of dish soap, sponges, rags, scrub brushes and more. Remove all of it to the cupboard under the sink.
  • Organize the contents of the refrigerator. Yes, buyers will look, especially if appliances are included in the sale.
  • Rearrange the contents of cupboards and drawers, removing large items that make the spaces appear cramped.

Paint

Over time, kitchen walls become grease-stained and splattered. A fresh coat of paint will cure that problem and give you a refreshed backdrop on which to work your decorating magic.

While grey was the go-to kitchen color in 2017, Elle Décor took a look ahead to 2018 and predicts that midnight blue will be the “it” kitchen color.

A 2017 Zillow study also found that blue appeals most to homebuyers.

But, since we’re talking staging, you may want to choose a lighter, softer shade. In fact, the study revealed that blue kitchens earn homeowners an average $1,809 boost of their sale price.

Make Investments

If your budget allows, and you decide to make investments in the kitchen, start with the appliances, because those are the hot buttons common among homebuyers. In fact,

“Studies show that sellers recoup every penny they spend on appliances,” according to HGTV.

The next item to splurge on is lighting. Kitchens can never have too much light, both overhead and task lighting. Consider installing LED lights under the cabinets and switching out the overhead fixture if it’s dated.

Additional items you may want to consider include:

  • A new kitchen faucet
  • New hardware for the cabinets and drawers
  • Rugs and curtains (in small kitchens, avoid busy patterns)
  • Artwork
  • If you have an eat-in kitchen, consider a striking centerpiece for the table

Clean

Freshly-painted walls and organized and decluttered cupboards are the first steps. Cleaning the kitchen – impeccably – is critical.

Yes, you’ll need to keep it that way while the home is on the market, but remember: It’s only temporary.