Trending: Danish modern furniture

What’s old typically becomes new, right? Whether it’s fashion, music, dance styles or décor, never count a trend down and out, because the chances are good that it will see a revival.

Scandinavian décor hit it big again a couple of years ago, especially in the midwest United States. And now, we’ve niched that down to a return to the “Danish modern” period of furniture design.

While once the epitome of tasteful, modern décor, Danish modern is now considered vintage, and in high demand. While some authentic pieces may run into the thousands of dollars, there are still bargains available if you don’t mind using pieces from lesser-known designers.

The Danish modern period runs, roughly, from 1920 to the 1960’s.

Danish modern history

The early 1900’s saw a plethora of new inventions including adhesive tape, the airplane, the ballpoint pen and the Model T. Furniture designers around the world also became caught up in the movement toward new concepts and ideas.

Kaare Klint, a designer from Copenhagen, felt otherwise. According to Andrew Hollingsworth, author of “Danish Modern,” Mr. Klint, a traditionalist, felt that there was no need to reinvent furniture.

Changing the lines and materials were all that was required to modernize traditional pieces. Klint ascribed to a design ideal that put comfort and utility over design.

Subsequent designers of note, such as Hans Wegner, Finn Juhl and Ole Wanscher expanded on Klint’s foundation to create what is now known as Danish modern furniture. 

Form

Danish modern furniture is, overall, simple, or, as Andrew Hollingsworth describes it, “austere.” While chairs were designed primarily for comfort, designers carefully sculptured them into works of art.

Free-flowing designs, such as Finn Juhl’s Pelikan chair, are examples of this concept: comfort combined with artistic flair.

Danish modern cabinetry has simple lines, chairs typically contain pointed arms and sofas are streamlined, many with asymmetrical backs.

 Wood

One of the hallmarks of true Danish modern furniture is dark wood. Teak was one of the more commonly used materials, with European oak running a close second. Rosewood was employed in higher-end designs, according to Andrew Hollingsworth.

Mahogany, while not common, was utilized during the latter half of the period. After World War II, when materials were scarce, designers began using plywood, bending it and molding it into their designs.

The famous Ant Chair, designed by Arne Jacobsen in 1952, used a single piece of plywood, bent into the design.

Metal

Poul Kjaerholm’s designs diverged from those of his contemporaries by his extensive use of steel instead of wood. In keeping with the main hallmark of Danish modern design – comfort – he combined steel with wood, leather and other materials.

Overall, the play of light on steel ignited his artistic sensibilities and provided stunning Danish modern pieces that today’s collectors clamor after. Check out this 3-seat sofa that sells today for more than $44,000.

Fabrics that define Danish Modern

Another common hallmark of Danish modern furniture is the choice of leather for upholstered pieces. Chairs and stools were frequently upholstered in different types of leather, with the patterns of ostrich leather in high demand.

Later in the movement, while leather was still prominent, stretch fabric was utilized frequently. While the darker colors, such as black and deep brown, were the most popular, toward the end of the period green and light blue leather were in vogue.

Learn more about Danish Modern at Collector’sWeekly.com and HiveModern.com and view creations from some of the more famous furniture designers at DanishFurniture.com.

Remodeling projects that give the most bang for the buck

The “Remodeling 2019 Cost vs. Value Report*” has just recently been released. A deep dive into which remodeling projects provide a homeowner with the best return on the money invested, the latest report is full of surprises.

In last year’s report, the three projects with the highest ROI were all improvements to the home’s exterior. These included:

  • Garage door replacement (98.3%)
  • Manufactured stone veneer (97.1%)
  • Entry door replacement (91.3%)

If you’re considering making repairs or remodeling your home and want to know how much the project will add to the value of your home, read on.

By the way, the report is broken down into “mid-range” and “upscale” projects. The former uses standard materials while the latter incorporates higher-priced versions.

Replace your garage door

The project on the list that returns the most money on your investment when you sell your home is a new garage door.

Although it costs more to do this year and the ROI is lower than it was in 2018, garage door replacement has maintained its number one spot on the list for two consecutive years.

This makes sense, since curb appeal is so important to a homeowner’s bottom line when the home is on the market.

This project is considered “upscale,” and it will run you about $3,600 (the national average). This price includes removing and disposing of the existing garage door and tracks and the installation of the new one.

The project calls for a four-section door on “new heavy-duty galvanized steel tracks; reuse existing motorized opener.”

It also has all the bells and whistles, such as foam insulation, thermal seals, windows and high-end hardware.

No, you won’t see a return of that $3,600 at the closing table when you sell the home, but you will get close. The upscale garage door replacement project yields a 97.5 percent return, or $3,520.

Remember, these are national averages. Costs vary among regions.

New siding

Although it’s listed as a mid-range project, ripping out the vinyl siding on your home and replacing it with manufactured stone veneer is pricey. But it completely transforms a home’s curb appeal.

The cost for this home renovation project includes removing the vinyl siding and replacing it with the stone veneer, underlaid with moisture barriers (two layers). This is a simplistic explanation of the scope of this project. You can read more and see before and after sketches at costvsvalue.com.

This project, on a national average basis, costs $8,907 (last year’s cost was $8,221) and its return on investment via your home’s value is projected to be $8,449, a 94.9 percent ROI.

Remodel the kitchen (just a little)

Kitchens help sell homes and if yours needs a minor remodel (using mid-range materials), now may be the time to get it done.

It’s a pricey job with an average national cost of $22,507. This price, for a 200 square-foot kitchen, includes new cabinet and drawer fronts (shaker-style) and countertops.

Add in a new stove and refrigerator (energy-efficient), sink and faucet, flooring and fresh paint for an 80.5 percent return on the money you invest.

When looking at the national average price of a project, keep in mind that the survey was conducted in 2018, when the remodeling industry was enjoying a “robust market,” according to the study’s authors, and prices were substantially higher because of tariffs.

This year’s costs may be quite different.

Keep in mind, as well, that the value added by home improvement projects is subjective. As the study’s authors explain, getting rid of a small bedroom to enlarge a bathroom “may be seen by a potential buyer as the loss of a bedroom, rather than the gain of a luxury bathroom”

 

* © 2019 Hanley Wood, LLC. Complete data from the Remodeling 2019 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.

Rental Property Tax Tips

Rental Agreement
Owning a rental property poses tax considerations that are more complex than the residential property you live in and requires a more refined tax strategy. Below is the tax information you need to know as well as some top tax tips for owners of rental properties.

Rental Property Tax Considerations

When filling in your tax returns, your rental property is listed in Schedule E, which documents your tax year income and expenses from the property itself. Income covers the rental payments you received while expenses covers your mortgage, repairs and maintenance, utilities, management fees and all other costs the property incurs.

If you pay points on the loan you used to purchase your rental property, you cannot deduct them completely from your taxable income like you can on a property purchased for residence. You must deduct the points over the whole length of your loan.

If your rental income from your property exceeds the expenses that the property incurred, that income is taxable.

If your property’s expenses are larger than the Schedule E rental income you accrued, you can deduct any losses from your taxable income if your non-property based income is less than $150,000 in the tax year. If you earned less than $100,000 in non-property income, you can deduct up to $25,000 of any losses your rental property incurred and if your non-property income is between $100,000 and $150,000, you can deduct up to $12,500. If you earn a non-property income above $150,000 you are not able to deduct any rental property losses from your taxable income.

If your earnings are above the threshold to deduct any rental property losses, you can amass losses as a counterbalance to capital gains taxes when you sell the property.

Speak to your tax adviser to see whether you can deduct rental losses from your taxable income or whether you can accrue losses against future capital gains taxes.

Tax Considerations When Selling Your Rental Property

When you sell a rental property, you are liable for capital gains taxes on your appreciation. It’s advisable that you seek out a tax adviser to give you an accurate breakdown of your costs and any profits that will be taxable as capital gains. However, there is a simple process to give you a rough idea of your net profit and estimate of your capital gains taxes.Take your property sale price and deduct the purchase price, cost of any modifications to improve the property, and all selling costs, including local taxes, agent fees, etc. The figure you are left with is your capital gain on the property, and based on your non-property income, you will have to pay up to 30% in federal and state taxes on your capital gains. Let’s see an example of how this formula works. If you bought a rental property 8 years ago for $200,000 and put 20 percent down with a standard 6% fixed rate 30 year mortgage, your current balance would be $140,435.If you made $10,000 in improvements to the property over the 8 years and sold it for $300,000, with no losses to offset you would be left with capital gains of around $69,000, after paying local taxes, agent fees, etc. Of the capital gains accrued you would have to pay somewhere between $17,000 and $21,000 in taxes, leaving around $120,000 from the sale of the property.

How To Minimize Rental Property Capital Gains Taxes

If you intend to buy a new rental property immediately after selling you can defer paying any capital gains taxes.The 1031 Exchange IRS benefit enables you to defer paying any capital gains taxes if you can identify, in writing, a new rental property within 45 days and complete the purchase of the property within 180 days of selling your previous rental property. To defer paying any capital gains taxes your new rental property should be of at least equal value of your sold property and you must invest all of the proceeds from your rental property sale.The 1031 Exchange defers and does not eliminate the taxes on the sale of your rental property. However, the IRS does not prohibit turning your new rental property into a primary residence in the future. Before taking part in a 1031 Exchange you should consult a tax advisor to ensure eligibility and how it relates to your unique tax situation.

Front yard landscaping for ranch-style homes

Designed by Cliff May in 1932, the ranch-style house was conceived specifically for California living.

Mr. May combined elements of the Spanish hacienda and Frank Lloyd Wright’s prairie-style design and expanded on them to include large windows to bring the California landscape visually closer to the home’s interior.

Other identifying features of the ranch house include the long, low layout and the gable roof.

Ranch-style home landscaping goals

The main goals when landscaping the ranch house are to visually raise its low profile and soften its sharp, square silhouette.

While other plants, such as trees and grasses, help meet these goals, the right shrubs do double — and sometimes triple — duty.

Low-growing shrubs in the front bed also help preserve one of the ranch home’s key architectural elements: picture windows.

Break up the straight lines with curved planting beds

Widening the front planting bed to at least 4 feet, and curving it, helps break up the straight lines of the front of the ranch house.

As you design the curved bed, place the center curve directly in the center of the front of the house, curving toward the house.

Raising the bed 10 inches with topsoil helps bring the eye up when viewing the home from the street.

Shrubs

We referred earlier to the importance of shrubs when landscaping the yard in front of a ranch house.

Toward the front of the beds, plant shrubs that remain small and have a rounded growing habit, or tolerate heavy pruning to make them round.

Winter Gem or dwarf English boxwoods are ideal and will thrive in the shade cast by the house’s eaves.

Variegated or colored foliage, such as the soft yellow of the gold thread cypress, draws the eye away from the house’s low profile.

Balance is an important landscaping concept, so a tall, conical tree or shrub is something to consider planting.

Shrub Placement

Plant the low-growing shrubs in the front bed, set back from the edge, in the same arc as the bed. Consider the following:

  • Box-leaf Euonymus (Euonymus japonicus ‘Microphyllus’) USDA Zones 6 – 9
  • Prostrate white Abelia (Abelia x grandiflora ‘Prostrata’) USDA zones 6 – 9
  • Cream De Mint™ dwarf mock orange (Pittosporum tobira ‘Shima’) USDA Zones 8 – 11

Enter your ZIP Code here to find your growing zone.

Set larger shrubs, such as azaleas, or the conical tree, at the corners of the house to provide a definite end to the house’s long line. These corner plantings also add a vertical focal point.

Aim for an asymmetrical grouping of plants. Ranch houses are supposed to be informal and were designed for simple, casual living.

Hey boomer: Considering buying a home in a retirement community?

Now, before you turn your nose up at the topic, we aren’t talking about senior living communities – those group homes for baby boomers and their elders where they take a little bus to Walmart once a week and someone else does all the cooking.

We’re talking about retirement communities – for boomers who are active and independent and want to downsize yet still be around people their age. They’re sometimes called “55+ communities.”

Yes, it’s the one case that a community can legally discriminate by saying “no youngsters allowed.” At least to live there.

Recent studies show that many boomers prefer to retire to urban centers, where they can be around a diverse age group, walk where they need to go and take advantage of the cultural and dining experiences that downtowns have to offer.

But, there’s still a big chunk of retirees who choose retirement communities so they can hang out with folks who share a common historic and cultural perspective. People closer in age.

Whether it’s a resort retirement community, a golf course community or a typical neighborhood-type community designated for “seniors,” there’s a lot to consider when buying a home in which to spend the rest of your life.

Will you relocate?

Spending an occasional holiday in a certain region and settling in for year-round living are two entirely different things. Even in the balmiest cities, there are changes in the weather and climate that you may not be familiar with.

For example, have you ever heard of Boise, Idaho’s inversion layer? It’s an atmospheric condition that traps polluted air in the valley, making it unhealthy to breathe for some residents.

The layer also traps moisture, creating “dense fog and gray, sunless days that we can get in the winter,” according to the Argus Observer online.

Even in what seems to be the “endless summer” of Hawaii, “vog” can hang in the air on the Big Island during volcanic eruptions. Oh, and the dust – covering windshields and even your indoor furniture.

While these are seasonal or event-dependent considerations, they are considerations, nonetheless. Learn all you can about the climate, weather and other events that may impact you, especially if you have an ongoing respiratory illness.

Then, spend some time in your choice of retirement cities during the off-season. For instance, spend an August in Florida to ensure you can tolerate the humidity, visit Arizona in early spring if you’re an allergy sufferer.

Oh, and if super-hot weather doesn’t agree with you and you have your heart set on retiring in Henderson, Nevada, visit during July when the average temperature is 105 degrees.

Who else lives there?

If you’re toying with the idea of buying a home in a “resort-style” retirement community, you’ll be spending more time with your neighbors than you would if you chose a standard 55+ neighborhood.

Tour the area during the times when the social activities you’re interested in participating in take place. Strike up conversations and study the group. See if these are people with whom you have a lot in common and with whom you’d like to spend more time.

While many of the homes in these types of retirement communities are of the condo variety, those that offer single-family homes frequently come without fences between neighbors.

In a standard neighborhood type arrangement, drive or walk through the neighborhood at different times of day and do stop and chat with any residents who are outside. 

Do you need nearby medical facilities?

Sure, this seems to be a no-brainer when choosing where to retire, but you’d be surprised how many people fall in love with a community that isn’t convenient to needed medical care.

The financial considerations

If there’s one thing that can greatly impact your income during retirement it’s taxes. To estimate your monthly obligations, including your new mortgage payment, requires careful consideration of taxes.

Seven states currently have no state income taxes:

  • Alaska
  • Florida
  • Nevada
  • South Dakota
  • Texas
  • Washington
  • Wyoming

Add Tennessee to the list, starting in 2021. While New Hampshire doesn’t “tax an individual’s earned income (W-2 wages),” it does impose a 5% tax on income from interest and dividends, according to BankRate.com.

But lack of a state income tax shouldn’t be your only consideration when thinking about paying as little tax during retirement as possible.

Buying even the least expensive home in a retirement community may not be worth it if that community is located in a state that taxes Social Security benefits, pensions and retirement plan distributions.

Since you’re buying a home, first look into property taxes. These can add greatly to your monthly mortgage payment.

Kiplinger.com offers a list of 10 Most Tax-Friendly States for Retirees and USAToday.com compares Average Property Taxes for all 50 States and D.C.

Bad credit home loans

It doesn’t take much to diminish a credit score. Something as small as a 30-day late payment can cause it to plummet.

If that payment goes another 30 days late, your credit score (which, for FICO, ranges between 300 to 850) will fall even more.

Soon, you may be considered a subprime borrower (those with credit scores below 670).

In December of last year, 71 percent of all home loans (for purchases, not refinances) went to borrowers with FICO scores over 700, according to Ellie Mae’s Origination Insight Report.

While this may sound devastating to someone with a low credit score, the reality is a bit better, at least right now.

In late 2018, banks reported eased lending standards for subprime borrowers.

Yes, it’s hard to get a mortgage with a credit score of less than 700, but it’s not impossible. Your best bet is to pursue an FHA loan.

While the agency will insure a loan to a borrower with even a 500-credit score, that borrower won’t be offered the attractive 3.5 percent down payment option but will have to pay at least 10 percent down.

FHA background

The Federal Housing Administration is an office of the Department of Housing and Urban Development (HUD).

According to the former’s website, the program “costs taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are captured in an account that is used to operate the program entirely.”

Which is not entirely true. After the last recession, FHA requested and got a taxpayer-funded bailout of about $1.7 billion.

FHA doesn’t grant loans, it ensures their repayment and, as mentioned earlier, it will do so even for borrowers with FICO scores as low as 500.

But your credit score isn’t the whole ball of wax

FHA’s requirements don’t always match lenders’ requirements.

So, although FHA says “Hey, we’ll insure a loan for this guy or gal with a 580-credit score,” the lender may say “Well, that’s just swell, but we don’t make loans to people with scores that low.”

While you can go online and try to find lenders’ minimum score requirements, why bother? Speak with a mortgage broker and let him or her do the heavy lifting for you.

Here are the steps to take to find an FHA-approved lender.

  1. Go online and navigate to HUD’s website.
  2. Leave the “Lender Name” box blank but enter city, county, state and ZIP Code.
  3. Under “Insurance Type,” tick only the box for “Title II Mortgage Programs.”
  4. Tick only the box for “Single Family Originator Only” under the “Service-Originator Type” heading. Click on “Search.”
  5. Contact the lender of your choice from the list provided.

Another option for borrowers with low credit scores

Bank of America and Neighborhood Assistance Corporation of America offer mortgages to certain low- and medium-income borrowers with poor credit. Some borrowers even qualify for zero down-payment loans.

Known as “character-based” lending, the program takes a wholistic view of the borrower’s finances, making allowances for credit dings for things such as late-paid medical bills.

It’s not an easy process, but well worth it if you’ve been turned down elsewhere. Find out more about the program online at Naca.com.

As soon as you get that loan pre-approval letter, call us. We love house hunting!

Spring lawn care schedule

Lush green lawns don’t happen without some serious help from the homeowner. Sure, grass may not die if not routinely cared for, but homeowners with a lawn-care schedule are the ones with the yards that are the envy of the neighborhood.

Spring is the perfect time to set about creating a lawn-care schedule. Stick to it and if it ever comes time to sell your home, its curb appeal will make it the belle of the local real estate market.

Early spring lawn care

After the gloom of winter, it’s tempting to want to jump outside and get started cleaning up what the season left behind. Tempting, yes. Wise, no.

Wait until the soil beneath the lawn is dry (or at least not sodden) and then get to work. Start by raking debris from the lawn. If it’s still a bit moist, work gently with a plastic leaf rake.

Grab a pocket knife and use it to dig out a plug from the lawn. Look particularly at the area of the plug between the soil and the grass. That layer is called thatch, a buildup of dead and living organic material between the soil and the grass blades.

If the thatch layer is more than ½-inch thick, the grass will end up rooting in that instead of the soil. This causes all kinds of problems, from making the lawn more susceptible to drought to providing safe haven for pests and disease organisms.

Dethatch the lawn by using a thatch rake. You can rent these at the big home improvement stores and learn how to use it by watching This Old House’s video at YouTube.com.

Avoid the crabgrass invasion

Crabgrass is that nasty, grassy weed that pops up when the weather warms and does its best to take over the lawn.

The best time to show crabgrass who’s boss is right now, before it shows up. Yup, it’s hiding under there, waiting for the just right time to pop from the soil.

And you can assert your bossiness by using a pre-emergent crabgrass control product. Not all of these products are safe to use on all grasses, so check the label to ensure it’s safe to use on yours.

Surflan is best for Buffalograss, for instance, since it doesn’t tolerate many of the herbicides on the market today. It’s even harder to find crabgrass control for St. Augustine lawns. Call the county extension office for ideas on what to use for our area and your specific grass type.

You’ll need a rotary spreader to apply pre-emergent weed treatment granules to the lawn and also for fertilizer application.

The first fertilizer application of the season

Wait until green-up has achieved at least 50 percent to apply your lawn’s first dose of fertilizer. Learn how to calculate how much fertilizer you need and how to apply it at YouTube.com.

If you plan on reseeding, you may want to wait until fall, but spring is the second-best time to do it. Ready for another video? Check out this one.

But, wait at least one month after fertilizing to reseed. And, if you’ve applied a weed killer, read the weed killer’s label to find out how long to wait to reseed.

Finally, mow the lawn. The first mowing of the season should be to 4 inches in height.

Now you can let the kids and pets out – that’s what lawns are for, right?

Make your vacant home irresistible to homebuyers

Let’s face it, not many of us can easily envision the lifestyle that an empty room might provide. This is why paint stores offer clever apps that allow us to see how a new color will look in our space and why model homes and condos are staged.

Yes, selling a vacant home is a bit more challenging than selling one that is occupied. These are homes that offer no promises of sanctuary and not even a hint of the simple, blissful moments one might realize under their roofs.

That lived-in, well-loved appeal left the home when you did.

It doesn’t matter why you had to move out of the house before it sold. What matters now is how you’re going to sell it — how does one market a vacant home?

You’ll need to spend some time – and some money – getting it right. But, since studies demonstrate that it takes significantly longer to sell an unfurnished home, the investment of your time and money will be completely worth it.

Want to know how to jazz up a vacant home? Read on.

DIY home staging

If you have an eye for design, consider staging at least the most important rooms in the home. Even if you aren’t particularly decorating-inclined, you’ll find brilliant DIY staging tips online at Better Homes & Gardens, HGTV’s “Designed to Sell” and A&E’s “Sell this House.”

The key to successful staging, however, happens before you decorate. Cleaning the home, from top-to-bottom and removing your excess belongings gives you a clean slate on which to work your magic.

Often, just a few well-placed pieces of furniture and accessories will help a home look lived-in.

Hire a professional home stager

If you have more money than time, hire a professional home stager. For one fee, the designer will bring in furniture, accessories and arrange them in a manner that shows off the home’s interior for maximum appeal to homebuyers.

Most homeowners spend between $433 and $909 to have their homes staged, according to statistics posted at ImproveNet.com. Prices vary by region and according to the size of the home, how much staging you require and the home’s price point.

Don’t neglect the yard

The front yard landscaping is especially important when a home is for sale. It’s what entices (or repels) people to enter the home. Keep the lawn green and mowed, the beds free of debris and shrubs and trees trimmed.

Studies prove that a furnished home sells 78 percent quicker, and for closer to asking price than a vacant home. Yes, selling a home with no “life” in it is challenging, but not impossible.

Prepare now to sell your home this spring

In all of our years in the real estate industry, here’s a truth we’ve learned: it’s the proactive homeowner who ends up having the smoothest home sale and, typically, makes the most money.

If you start now, you’ll have plenty of time to prepare your home (and yourself) for the spring market and be among those success stories.

Will you be buying a home when this one sells?

Let’s get a market analysis done now so that we have at least a rough idea of your home’s current market value. Yes, it’s a bit early, but we just need a ballpark figure for you to take to a lender.

He or she can then present options for buying the next home. The worst thing you can do is sell your home before being pre-approved for a loan for your next home, so speak with the lender about what you need to do, financially, to ensure mortgage approval.

Consider a pre-sale home inspection

Having your home professionally inspected before putting it on the market is proactivity on steroids. After all, one of the most common home sale deal-breakers is the home inspection report.

Or, more specifically, issues in the report that the buyer perceives as insurmountable.

Let’s find out now what an inspector will learn with a thorough home inspection. That way, we can discuss the issues and decide which absolutely must be remedied and which don’t. And, since we’re starting so early, you’ll have time to get the work done before the home hits the MLS in spring.

Do what you can to increase curb appeal

Spring officially arrives on March 20 this year so you have plenty of time to get the home ready for the market.

Now is obviously not the right time of year to get out in the garden, mow the lawn or do any of the other tasks required to get the landscaping in shape for a home sale. There are things you can do, however, that don’t necessarily involve gardening.

  • Dismantle the mailbox, bring it in the garage and slap some fresh paint on it.
  • Shop for a new doormat, larger address numbers and porch light fixture.
  • Draw out a plan for where you’ll plant pops of color when the weather warms.
  • Make a list of early spring chores in the front yard. Clearing debris, trimming hedges and trees, spreading fresh mulch and whatever else you’ll need to make the exterior of the home more appealing to buyers.

Pre-staging

Now is the perfect time to construct a home staging plan. Pre-staging makes the job go easier.

This may include removing personal items, deep cleaning, applying fresh paint and culling excess items from cupboards, drawers, the pantry and closets (to make them appear roomier).

Not all homes require staging but if yours does, it is one of the most important parts of any marketing plan.

Again, don’t wait

A home sale includes a lot of details that you’ll want to pay attention to when the time comes.

In the meantime, it’s a smart move to rid yourself of the little distractions, such as small home repairs and accomplishing cosmetic touch-ups.

The spring real estate market is right around the corner. The time to prepare for a spring home sale is right now.

 

First time buyer? 3 things you need to buy a home

Most homeowners can clearly recall that moment it became clear that they could, and would, buy a home. Ditching the landlord is a dream of many and when you can see that dream – grasp it – it’s intoxicating.

It’s easy to jump right into the process and let the cards fall where they may, but it’s not wise. There’s a system to buying a home, and those that are successful follow the steps.

Before you jump online to look at homes for sale, start with the basics: the 3 basic things you need to buy a home.

You’ll need a mortgage

Unless you are among the 23 percent of homebuyers who will pay cash for a home, you’ll need to borrow the money to pay for it.

The loan you’ll use is called a “mortgage,” a word which traces its origins appropriately to the Old French “death pledge.” Ok, so 30 years may not put you on death’s door, but it will feel as if you’ve been repaying this loan forever.

But, look what you get in return. The freedom to have a pet, or two. The luxury of painting your living room any color you want and the liberation of knowing that a landlord will never be calling you to schedule an inspection of his or her property.

Shopping for a mortgage is something that shouldn’t be entered into lightly. There is a lot more to consider, for instance, than the interest rate. Additional considerations are covered in detail at Investopedia.com, WashingtonPost.com and, if you prefer video, Money Talks News.

You’ll need cash

You most likely know you’ll need cash for a down payment on the home you finally choose. If you’re using a Veterans Administration or U.S. Department of Agriculture loan you may not have to pay anything in down payment funds.

FHA lenders, on the other hand, bases the amount required, at least partially, on your credit score and it could range from 3.5 to 10 percent.

Then, there are the Fannie Mae and Freddie Mac programs which require from 3 to 20 percent down. But, that’s not all the cash you’ll need.

While not the big chunk that the down payment represents, the earnest money deposit  will need to be paid when the seller accepts your offer to purchase (or shortly after). The amount of this deposit varies, but it’s typically around 1 to 5 percent of the purchase price. At closing, it will be credited toward what you owe.

Speaking of closing, there is a three-word phrase that few people warn first-time homebuyers about: “cash to close.” You may have heard of this chunk of money referred to as “closing costs.”

This amount includes all the fees and expenses that are related to actually making the loan and the closing process. They might include transfer fees and taxes, attorney and notary fees, title fees and more.

While closing costs vary, expect to pay between 2 and 5 percent of the purchase price, unless the seller has agreed to pay all or a part of your closing costs.

This money, along with your down payment, is due at closing so most homebuyers wire the funds to the title company (or whomever is acting as the closing agent) or bring a cashier’s check to closing.

The lender will let you know the total amount of cash you’ll need to close in advance of the actual closing.

You’ll need a real estate agent

Sure, this sounds like a no-brainer, but you’d be surprised how cavalierly many first-time homebuyers treat this part of the process.

In fact, studies by the National Association of Realtors finds a significant percentage of real estate consumers enlist the help of the first real estate agent they speak with.

Crazy, isn’t it? Americans spend hours on review sites such as Yelp.com in an effort to protect their dining dollars.

They read reviews at Amazon.com to ensure they’re buying the right dog leash for Fluffy. Yet they spend little, if any, time reviewing the qualifications of someone they’ll entrust to help them make what may just be the largest investment of their lifetime.

Don’t be like these people. Real estate agents are not all alike. Interview at least three. Learn about their experience, their negotiating successes, their availability and exactly what they’ll do to help you find a home.

Now, the fun part begins – looking at homes for sale.