How to buy a home after bankruptcy

for-bk-piece

 

Remember when declaring bankruptcy was kept a dirty little secret? The social stigma was bad enough, but the impacts of bankruptcy included employers who refused to hire anyone that went through the process and, of course, the ruinous end result of a credit score in the gutter.

The bankrupt were seen as irresponsible spendthrifts and offered little sympathy. The Great Recession changed these perceptions, thereby softening the stigma attached to those who are forced to take their debt to court to have it discharged.

If you’re among the estimated 800,000 Americans who file bankruptcy each year and dream of buying a home in the near future, read on for everything you’ll need to know about buying a home after bankruptcy.

Which type of bankruptcy is easier to recover from?

The two most common personal bankruptcy proceedings in the U.S. are known as Chapter 13 and Chapter 7. The latter will, with a few exceptions, eliminate all of your debt while the former (Chapter 13) leaves you on the hook to repay your debts over a certain period of time (typically three to five years).

If you hope to purchase a home in the near future, a Chapter 7 proceeding is your best bet. Not only is it quicker, but because all of your debt is wiped out, your debt-to-income ratio is lowered and you now have a decent foundation on which to build the credit you’ll need to get a mortgage.

Your credit and your debt

Debt is a fact of life for many Americans, with an average of $29,093 per consumer, according to credit bureau Experian’s State of Credit study.

From outstanding student loan balances to credit card bills, a big chunk of our monthly income goes to pay this debt. And, although you no longer have to pay those discharged in a Chapter 7 proceeding, your former debt will be listed on your credit report as discharged through bankruptcy.

And, of course, the bankruptcy will put a huge dent in your credit score. In fact, plan on having a score around 604, the average for Americans who have claimed bankruptcy, according to the Experian National Score Index. For comparison sake, the average score for an American that hasn’t discharged debt through bankruptcy is 677.

The fact is that you are now considered a subprime borrower and will face higher interest rate offers from lenders than you would had you not claimed bankruptcy.

To prove to lenders that you’ve learned your lesson and can now use credit responsibly requires actually doing just that. As soon as possible, obtain a credit card, keep the balance below one-third of your credit limit and make all payments on time. This is the first step toward rebuilding your credit and it won’t happen overnight.

How long does it take to buy a house after bankruptcy?

There is some confusion among consumers about when the clock starts ticking for the waiting period to buy a home after bankruptcy. Lenders look at the discharge date, not the filing date. Once the process is complete, file the discharge paperwork in a safe, accessible place because your lender will ask for it  when you finally apply for a mortgage.

While the waiting period to get a mortgage after bankruptcy varies, plan on taking at least 18 to 24 months after the discharge. This may seem like a terribly long time, but not if you use the time wisely – to work on raising your credit score.

If you hope to obtain a Rural Development mortgage through the USDA, you will need to wait three years after the Chapter 7 bankruptcy is discharged and only one year if you filed Chapter 13 and can show that you’ve successfully stuck to the payment plan set forth by the court.

FHA and the Veterans Administration programs require a two-year wait after a discharge of bankruptcy and you may have to wait up to four years to obtain a conventional loan.

If your home was included in the bankruptcy proceedings you may have to wait significantly longer, so speak with a lender to find out the specifics to your situation.

 

House Hunting? Don’t Compromise on Storage Space

adequate storage in new house

Compromise is good, especially when deciding what you want in a home as opposed to what other family members want. There are certain criteria, however, that you should think long and hard about giving up and adequate storage space should be at the top of the list.

The average American home contains 300,000 items, according to Los Angeles Times’ Mary MacVean. Realtor Magazine claims that not having enough storage space for all this “stuff” leads to buyer’s remorse for 80 percent of homebuyers.

Furthermore, one of every 10 households in the U.S. rents a storage unit, according to the Self  Storage Association. If you are among them and you plan on moving all of your belongings from the unit to the new house, it’s wise to ensure there’s enough room for it all before signing the purchase contract.

To keep yourself from becoming distracted by other, more sexy features of a home, print off a copy of the U.S. Department of Housing and Urban Development’s (HUD) “Home Buying Checklist.” Look at number six on the list – in fact, burn it into your memory.

Bedroom storage needs

In the real estate industry, a room isn’t really a bedroom (and can’t be called one) unless it contains a closet. If you’re looking at a four-bedroom home and one of the bedrooms lacks a closet, you are, in reality, looking at a three-bedroom home. Why is this important? Because an appraiser will not evaluate this home as a four-bedroom home. And you shouldn’t either.

That said, when you’re touring a home, take a good look at the closets in the bedrooms. Don’t worry about being nosy; this is important stuff here, so swing open that closet door and take a good, long look inside.

First, the basics: is there enough room for the clothing that needs to be stored within? A tip-off that it might not be is if the closet is stuffed to overflowing with the current homeowner’s clothes.

Is there adequate shelving in the closet or, at least, room to add shelves? If you enjoy closet built-ins in your current home, ensure that there is enough room in the closets for those as well.

Bathroom storage

Don’t be surprised if you find most of the bathrooms you view to be sorely lacking in storage options. Tract homes, especially, offer little other than a few drawers and a cupboard or two beneath the vanity.

Consider a linen closet in the bathroom a bonus because you can store towels, toiletries and other items that are usually strewn across the counters because of a lack of storage space.

What about your kitchen stuff?

Most of the 80 percent of aforementioned home-buyers who claim to have “one major regret,”  claim that if they had to do it again they would choose a home with more storage space. In the kitchen, adequate storage is a must.

If the kitchen in the home you’re considering lacks a pantry, guess where all those food items will have to be kept? That’s right, in the cupboards, taking valuable storage space for pots and pans, dishes, glassware and small appliances.

Don’t let the lack of a formal pantry spoil the chances of getting a home that you really want, however. If there is room to add one, you can have one built or even buy one of the clever storage solutions on the market today. Ikea has a number of items that make attractive and roomy pantries.

The rest of the story

Where will you store your linens, coats, gardening implements, home cleaning supplies and hobby items? What about the laundry room? Is there room for detergent, fabric softener and the other items you use?

Then, there’s the mudroom, which often ends up as the repository for items for which there is no storage space. Nasty dirty shoes and clothes, big, bulky winter recreation items and more all take up residence in the mudroom. Thankfully, if there is enough space here, a mudroom is the ideal area for built-ins in which you can store the overflow from the rest of the house, if need be.

Many home buyers underestimate how much space they’ll need for storage, so take a good look at your current situation before heading out to look at homes. In fact, take measurements at the current home and the new home so that you can make accurate comparisons. Like test driving a car, you are completely within your rights to inspect and measure areas of every home you tour to ensure that it meets your needs.

 

How Safe is The Air in That Home You Have Your Eye on?

radon gas in homes

Have you made your list of must-haves for your new house? Like any shopping trip, a list of what you need and want makes the project a lot easier. Aside from the gourmet kitchen or the extra bathroom, consider putting “safe indoor air” on that list.

According to the U.S. Environmental Protection Agency (EPA), because the average American spends more time indoors than out, “the risks to health may be greater due to exposure to air pollution indoors than outdoors.” This is especially important to note if you have very young children, as their lungs are still developing.

Indoor air pollution comes from a number of sources, including:

  • Pollen and mold
  • Cigarette smoke
  • Pesticides, cleaners and other household products
  • Building and furniture materials that contain formaldehyde, lead and asbestos
  • Gases, such as carbon monoxide and radon

Radon gas dangers

Radon, a radioactive gas, has been found in homes nationwide. Insidious, it can be neither seen nor smelled. It is formed by the breakdown of rocks that emit radium and uranium and seeps into the home through cracks in the foundation. Exposure to radon gas, for prolonged periods, causes lung cancer. In fact, according to the National Cancer Institute, radon gas exposure is the second leading cause of lung cancer in the United States.

Radon test kits and home buying

It doesn’t matter that a neighbor’s house tested negative for radon, as houses on the same street may have vastly different radon levels. It doesn’t matter if the house is old or newly-built. The only way to determine if a house you are interested in purchasing has high radon levels is to test the air.
Some sellers perform radon tests prior to putting their homes on the market. This way, if there are problems, they have a chance to address radon gas dangers before selling. While this is commendable, check the seller’s radon test for:

  • The date the test was performed
  • Who performed the test
  • The part of the house that was tested

Determine what, if any, changes have been made to the house since testing. Replacement or repair of heating and air conditioning systems may affect radon levels in the home.

While home testing kits are available to the public, and recommended as effective by the United States Environmental Protection Agency (EPA), many potential purchasers feel more comfortable with tests performed by professional testing companies. As a purchaser, you need to make up your own mind in regards to this.

If a house has not undergone a radon test, you may want to request one of the seller and have your agent insert a radon testing contingency into the purchase agreement. If the test doesn’t meet with your approval, or the seller refuses to fix the radon levels in the home, you can legally walk away from the contract.

Fixing radon gas issues

The EPA considers any home with radon levels of 4 picocuries per liter (pCi/L) or higher to be a problem, and suggests taking action to reduce the levels. Mitigation costs vary, depending on the age of the house and how it was constructed. The EPA has a list of approved testing professionals and radon mitigation services, by state, on their website.

Radon reduction typically involves a combination of techniques, such as sealing foundation cracks along with the installation of a vent pipe and fan, known as sub-slab depressurization.

The EPA recommends that you open windows and doors in the home to increase ventilation and to allow the radon to escape. The only problem with this natural solution is that, once windows and doors are closed, radon levels return to their previous levels within 12 hours. Which is exactly why winter is the best time to test the air in a home.

What is an escrow or impound account?

impound account pays taxes

To many first-time homebuyers, one of the most confusing parts of the process is sitting across from the closing agent, who is tossing them pieces of paper from a huge stack, quickly explaining what each one means and asking for signatures. From real estate transfer documents to loan documents to title documents there are, what seem to the newbie at least, hundreds of pages to sign.

Who can retain all of that information? So, at some point during the ensuing weeks and months, when everything settles down, don’t be surprised if you wonder when your property taxes are due. After all, you’ve just laid down a huge chunk of money to buy the house and you naturally want to make sure you can pay the taxes.

Think back to that closing agent and recall the words “impound” or “escrow” account. Then, breathe a huge sigh of relief because the tax bill has been paid, and will be paid in the future, through the impound account held by your lender. If you have one, that is.

What is an escrow account?

Your lender may refer to this account as an “escrow account,” “impound account,” or even an “escrow impound account.” Whatever it’s called, it’s an account the lender sets up to ensure that certain expenses for the property are paid, and on time.

These expenses include homeowners insurance and, yes, property taxes. Basically, any bill that, if not paid might result in the forfeiture of the home to an entity other than the lender, will be paid from the impound account.

Do I have to have an impound or escrow account?

The great majority of lenders will require that these bills be paid using an escrow or impound account. Although this set-up benefits the lender financially, there is a huge advantage for the homeowner (not having to worry about and budgeting for the monthly payments for these items) as well.

In fact, many financial advisors recommend that homeowners who don’t have impound accounts with their lenders request one.

How an escrow account works

Your mortgage payment consists of a set of smaller, individual payments, known as PITI. These include:

  • Principal – The part of your check each month that goes to paying down the loan’s balance (the principal). This part of the payment starts out small (painfully so) and increases over time.
  • Interest – This is the payment to the lender for lending you money. Because you pay this off before the principal is fully paid, less of your payment will go toward interest and more toward the principal as time goes on.
  • Taxes – Property taxes are typically, but not always, included in the impound account. If they’re not, it’s up to you to make these payments. Check with your lender or servicer if you’re unsure. If you have a government-backed loan, however, you most likely have funds for tax payments included in your impound account.
  • Insurance – Hazard insurance is a lender requirement and since the lender wants to ensure the safety of its investment, the payment for the policy will be included in your monthly mortgage payment.
  • Mortgage Insurance – If you have a government-backed loan, the mortgage insurance premium (similar to PMI) will be included in your payment.

Here’s an example

Suppose that your property tax bill is $1,000 per year — $83.33 of your monthly mortgage payment is dedicated to pay that bill. If your homeowners insurance premium is $1,034 (the average premium across the United States, according to the National Association of Insurance Commissioners), then an additional $86.17 a month is tacked on to your mortgage payment. So, your mortgage payment will include payment for these two items, plus interest on the loan and on the loan’s balance.

Check your mortgage statements every month to see the balance of the escrow account. Federal law requires that your lender or servicer review your account annually to ensure that you’re paying the right amount. If you’re paying too much, you are owed a refund. By the same token, if you aren’t paying enough, you’ll be required to pay more.

If your lender didn’t require an escrow impound account, you can ask for one to be established. Especially if you’re on a tight budget or find it challenging to save for future expenses, an impound account acts as a forced savings account out of which very important bills are paid.

Tips to Remain Sane While Your Home is For Sale

keep your house clean while its for sale

In a perfect world, the entire family pitches in every morning to clean last night’s clutter and mess before heading out to work/school. In the real world? Not so much. But when your home is on the market, it’s important that you strive to get as close to that perfect world as possible. A hassle? Oh, yes. Crazy making? Indeed. But we have some tips to help you retain some of your sanity until the house sells.

Start with a clean slate

A deep, deep clean, fresh paint – you’ve no doubt heard it all before. Whether it’s to set the foundation for staging or just to make the home presentable for the market, there’s no getting around the fact that to get what you want for the home, it must be incredibly clean. If you can’t get the job done by yourself, or with help from friends and family, hire someone to do it for you – it’s that important.

The next step in the process of readying the home for the market is, again, a familiar one: depersonalize and declutter. This is the ideal time to pre-pack for the move after the home sells, which, in turn, gives the family less “stuff” to have to pick up before showings.

One of the best places to start is in the children’s room. Pack up some of their toys, especially those with a lot of pieces (LEGO® sets come to mind). You don’t necessarily need to seal those boxes. In fact, if you don’t, you can rotate toys as they tire of the current inventory.

Go through the house with a mission: seek and remove anything you don’t use on a consistent basis. Box it up and move it out.

Keep it clean without losing your mind

The home is clean and it’s free from clutter. Showings will be a piece of cake, right? Not so fast – you still need to live in the home and, if you have a family, they do to. This means you’ll need to keep on top of the ongoing messes that living in a house creates.

Sure, it sounds easier said than done, but if you create a plan, it will be a lot easier than if you don’t. Each family member should have routine tasks that they perform every morning before they head out for the day. This includes making their beds, picking up any messes they made the night before, ensuring dirty laundry is in the proper place, wiping down the counters in the bathroom after their morning showers and loading the dishwasher.

Evening chores may include sorting and putting away mail and other clutter that has accumulated since day’s end.

The big jobs, such as mopping and vacuuming the floors, cleaning sinks and toilets and folding laundry can be assigned to family members on alternating days. If everyone knows what they’re supposed to do, they’re far more likely to buy into the plan.

Last-minute minute showings

So, what happens if you get a request for a showing between those times that you clean? You know, when you are actually using the home to live in? Ah, homeowners are a crafty bunch and we’ve collected some tips from our clients that are not only rather funny but realistic as well.

“With four kids in the house we go through a lot of laundry,” a client tells us. “There’s usually piles of it scattered through the bedrooms and in the laundry room. I just race through the house, grab it and dump it in the washer and dryer where nobody will see it.”

Others have told us they use laundry baskets or boxes to grab clutter and then put it in the trunk of their car. Yes, even dirty dishes.

When a potential buyer is within an hour of being on your doorstep, prioritize your cleaning tasks, because some are more important than others.

  • Pick up clutter. If you don’t have time to put it away, take it with you.
  • Wash dishes or load them into the dishwasher.
  • Empty all the trash receptacles in the home.
  • Ensure that bathroom counters are free of toiletries and wipe them down. Hang fresh towels and close the shower curtain and lower the lid on the toilet.
  • Vacuum
  • Straighten the linens on the beds.
  • Straighten the sofa cushions and pillows.
  • Open all window coverings to let the sunshine in.
  • Turn on all the lights in the home, even in the closets.

 

Should your home look perfect when buyers come calling? Sure it should, but there may be times, such as with last-minute showings, that it won’t be. Don’t stress about it. As long as it is pristinely clean and relatively tidy, you’ll be fine.

4 ways to furnish your new home for less

furnish your home for less

 

Between the down payment and the closing costs for the mortgage, homebuyers aren’t left with a whole lot of money. Yet, there are still movers to pay and, quite possibly, appliances to purchase and minor fixes to perform.

So, how will you furnish the new digs – especially if you can’t stand the thought of dragging your mismatched furniture from your rental to your new, yes-indeed-I-own-this home? Many of our first-time buying clients aim for something between buying new and keeping the old, so decide what’s worth keeping and then list what you’ll need to purchase.

And, lucky you, we’ve put together a list of places to help you furnish your new home for less.

“Used” means you’ll save money

“Used” doesn’t necessarily mean “nasty.” Especially if you’re a fan of DIY anything, how a piece looks when you first see it may have no resemblance to what it will look like after you work your magic.

If you’re not particularly handy, you may find it more of a challenge to envision a piece of furniture’s possibilities. Before you go shopping, take a stroll through online sites that deal with DIY furniture makeovers – Pinterest is an ideal place to start. The photos alone will open your eyes to the possibilities, whether you do it yourself or hire a professional.

A good rule of thumb is to focus your attention of the furniture’s style, instead of the torn or dated upholstery. Of course anything from a smoker’s home or with pet odors should be passed by – some odors are impossible to remove. Here are 4 tips to get you started shopping for your new home, on the cheap.

1. Estate and garage sales

Both garage and estate sales offer bargains when it comes to purchasing used home goods. Estate sale prices are typically higher than those you’ll find at garage sales, but the merchandise is often more high-end and well maintained.

Check Craigslist for listings of garage and estate sales near you. You may also see signs posted around the neighborhood.

2. Consignment stores

Consignment stores are the middle men (or women) between the owner of the goods and the buyer. Sort of a for-sale-by-owner situation with the benefit of the consignment store owner offering a showroom and taking on the drudgery of the sales process. Yes, the store owner receives a portion of the sale proceeds, so bargains are often hard to find in these stores.

Do a Google search for consignment stores in your ZIP code and pay them a visit. You can find the occasional bargain so don’t count them out in your search for “new” furniture and home goods.

3. Thrift shops

Thrift stores can be hit or miss on the quality of merchandise offered. The good news is that prices are quite low at thrift stores such as Goodwill Industries, Salvation Army and Habitat for Humanity’s ReStore.

An alternative to thrift shops, especially if you’re looking for something unique to apply your DIY skills to, are salvage yards. Again, Google is your friend when seeking these out.

4. Online shopping

Craigslist is the granddaddy of inexpensive home furnishings and, the best part is that it’s local. You’ll find home goods scattered throughout the many categories on Craigslist, but start in the “For Sale” section. From there, drill down to the “Free” link. You never know what kind of interesting bargains someone is willing to part with for free.

Below the free section you’ll find a link to the site’s furniture listings. Dealer merchandise is lumped in with consumer items but you can select whether or not to show those by using the information on the left side of the page. You can also search by item name so you don’t have to scroll through listings for everything but headboards, or whatever it is you’re looking for.

Other sections to check include the Antique and Household sections, further down the list.

eBay offers furniture and other household goods but, unless the seller is local, the shipping charges may take an otherwise bargain-priced item out of the running. Thankfully, the site has a way to filter your search by miles from your ZIP code. For instance, type “headboards” into eBay’s search box and scroll down the page until you find “Item Location.” You can also limit your search to those items with free shipping.

Etsy is a fun site that sells a lot of interesting handmade items, especially home accessories. Using our headboard example again, type “headboard” into Etsy’s search box. Then, on the left side of the page, under “Refine your Search,” you’ll find the option to “Shop Location,” and a “Choose a Custom Location” link to refine the search even more.

Sure, we’d all love to furnish our new homes with furniture and accessories from the high-end stores, but new houses frequently zap our reserve funds. Shopping frugally allows you to make big, dramatic changes to your new home’s décor without breaking the bank.

How to Get Rid of Tobacco Stench in Your New Home

Selling a home that reeks of tobacco smoke is quite the accomplishment and that you purchased it makes you one brave buckaroo. The accolades don’t help, though, when you come home from work, open the door and the stench hits your nose.

The good news is that 20 percent fewer Americans smoke cigarettes now than they did in 2005 and at this point, smokers represent only 17.8 percent of the population, according to the Centers for Disease Control and Prevention.

The bad news is that you fell head over heels for a home in which one of these Americans lived, and smoked. Cigarette smoke sticks to everything, from the carpets and walls to the entire HVAC system. If it were cheap and easy to remove, trust us, the seller would’ve done it. Instead, you inherited the stink and the toxins that cigarette smoking left behind. Let’s take a look at ways to get rid of the gunk.

Start with the walls

You’ve no doubt done your online research on the subject and you’re armed with a bottle of vinegar and water. Guess what? It doesn’t work. What just might work on the walls and the ceiling is a mixture of one part of chlorine bleach diluted with five parts of water.

NOTE: Never mix bleach with anything but water. Combining chlorine bleach with ammonia or certain other products is especially dangerous because it creates a toxic gas.

Perform the cleaning on a day when the kids are in school because bleach is especially nasty on developing lungs. Open all the windows before you start and don a pair of chemical-proof gloves. If at any time during the process you feel woozy or you start coughing, go outside and get fresh air.

Scary, right? If you wear a breathing mask and protective gloves you should be ok. Use a sponge dipped in the solution to scrub the walls and ceiling. Rinse the sponge repeatedly to ensure you aren’t reapplying the residue back to the surfaces.

If you prefer not to mess with bleach, try TSP — although it, too, comes with warnings. Before you decide, read Bob Villa’s pros and cons.

If you have a large home, you may want to hire someone to help you or, better yet, to do the whole job.

Cover it

Once the walls are clean you’ll need to seal them with primer and the best primer to block cigarette smoke residue is KILZ. It will seal in the stink and set the walls up for that gorgeous paint you’ve been dying to slap on them.

Get rid of odor holders

There are a few other areas of the home that need your attention. Anything made of fabric needs to be ripped out and tossed. This includes carpet and draperies included in the sale. No matter how many times you shampoo that carpet the smell will cling. It’s most likely penetrated the padding under the carpet as well.

Remove the HVAC registers and toss them in the dishwasher. If they still aren’t clean, soak them in extra-hot water and your favorite cleaning product (I like ammonia for sticky residues but remember not to mix it with bleach). You may need to use an old toothbrush to get into the slats. While they’re soaking, peer into the ducts to see if there is dust, as that is an odor magnet. If so, clear it out.

Did you know that grease also absorbs odors? That’s not just stale food you smell in the kitchen and the range hood is probably the culprit. Look under it – especially at the small mesh filter. If it’s caked with grease, it’s probably another source of the tobacco smell in the home.

You have two options here: try to clean it (easier said than done), or buy a new filter (the big home improvement stores sell them for as little as $10).

Hopefully, you’ll be painting the kitchen as well, so the KILZ and lovely new paint will get rid of what’s left of the stench.

The air you breathe – and smell

Getting rid of the HVAC filter and installing a new one is a no-brainer, but what about the rest of the HVAC system? If someone was puffing toxic fumes in the home for a number of years, and the fumes were sucked into the system, it’s only logical that the various components might need to be cleaned as well. This, of course, calls for a professional, but here’s what we were able to learn.

If you turn on the unit and smell tobacco the residue may be clinging to the evaporator coil (if you have one), the blower fan, around the heat exchanger, plenums, and grille boots. A professional can take a look at these components and clean them, if necessary.

Finally, you’ll need to clean woodwork and glass. This means all of the cabinetry (don’t neglect the insides of drawers and cabinets), mirrors, windows, light fixtures and ceiling fans. If all else fails, you may need to sand and stain the cabinetry in the bathrooms and kitchen and any wooden built-ins.

If the smell lingers, despite your hard work, you may consider using an ozone generator. Before you do, please consider the facts in this article from the U.S. Environmental Protection Agency.

Cigarette smoke is insidious and will creep into every crack and cranny in the home. Getting rid of it isn’t impossible, but it will take time.

2 reasons NOT to sell your home “as-is” and what to do if you must

 

We can think of several reasons why a homeowner would consider selling a home with problems, marketed in “as-is” condition. The most obvious, of course, is that there’s no money to perform the required work. This frequently happens in probate sales where the heirs inherit a home in need of work but lack the funds to put the home in market condition. As well, folks who need to relocate quickly for a job often just want the house off their hands so they can move on with their lives.

Although we understand why someone may need to sell a home as-is, we believe our clients need to know the possible ramifications of doing so. Let’s take a look at two reasons you might want to reconsider your decision to sell your home “as-is,” and what to do if you absolutely must.

1.You’ll have fewer qualified buyers if you sell as-is

When your home is advertised as a fixer, which is what most as-is listings are, you’ll partially drain the pool of buyers who can buy your home. For instance, since FHA-backed mortgages require that certain repairs be made before they’ll ok a loan, your buyer pool won’t contain many first-time buyers.

Then, those who are getting a conventional loan may be getting out of the pool as well since many conventional lenders balk at lending money for a home that needs significant work. Many conventional lenders will insist that certain items, such as a roof in need of replacement, be taken care of.

Then, there’s the fact that most buyers just don’t have the money to repair a home after moving in. Although your low price will attract the tight-budget buyer, the reality of the financial outlays after closing may prevent them from proceeding with a purchase.

Your buyer pool now contains mainly cash buyers and most cash buyers are investors – the most real estate savvy homebuyers. They’re out for a bargain and if you hope to sell your home at all, you may end up taking an offer for far less money than you’d imagined.

2.You won’t make as much as you hope

Today’s homebuyers say they want a home that they can move right into, stick their toothbrush in the holder in the bathroom and enjoy their new digs. So, why would a buyer want your home? When you consider this question, there can be only one answer: A buyer would want your as-is home because it’s cheap.

Depending on the extent of needed repairs, you will have to list your home for less than nearby homes that are in better condition. As mentioned earlier, a low listing price will bring out investors and everyone else looking for a bargain. Be prepared to get beat up over your price, regardless of how low it is, and to sell it for less than you’d hoped.

It’s quite possible that it may be more cost-effective in the long run to make the necessary repairs so that you can list at a higher price. This is something you should speak with your accountant about.

If you must sell as-is

We understand that certain home repairs may be financially out of the question for some sellers and they simply must sell the home in its current condition. Here are 3 tips to help:

Stage the home

Appearance matters more in real estate than most other industries. With attention to increasing the home’s curb appeal and some fresh paint and a good scrubbing inside, even the worst home will look better.

Most buyers will decide whether or not to view your home while shopping online, so paying attention to cosmetics makes for compelling listing photos. Sure, they’ll know that there is something wrong with the home (“as-is” advertises that), but if it looks ok, the perception will be that whatever is wrong with it can’t be that bad. Getting more people to view the home in person is the name of the game when it comes to selling quickly and for more money.

Consider a pre-sale home inspection

Sure, you have a good idea of what’s wrong with the home, but there may be more, or less, than you imagine. A pre-sale home inspection will give you the definitive answers you need and will go a long way in showing potential buyers that you’re earnest in your desire to be completely honest about the home’s condition.

Plus, if you supply the buyer with the inspection results before accepting the offer, you’ll be able to weed out those that will eventually back out, after they have their own home inspection.

Disclose everything

Protect yourself by disclosing all known issues concerning the home and the neighborhood. Yes, it feels as if you’re betraying yourself, but disclosure is important if you want to avoid running afoul of the law and winding up in court. Disclose Every. Last. Thing.

 

Congrats on the new home – let’s get that home office set up

As you get close to closing on a new home thoughts tend to turn from dollar and cents, contracts and contingencies to furniture, paint colors, appliances and other décor. If you work from home, it will be important to get the office set up immediately so we’ve put together this handy guide to get you up and running quickly.

Location and size

And here you thought you’d heard the last of “location, location, location,” right? Unless you live alone, which room you’ll use for your home office, however, is important to your productivity. If you are easily distracted, find a spot that’s as removed from the rest of the home as possible.

When scouting around the house for the ideal office location, notice how much natural light each room receives. The best choice would be the room with the most natural daylight, which will help you focus and remain productive, according to a study published in the Journal of Clinical Sleep Medicine.Exposure to sunlight provides “a profound way to improve office workers’ productivity and health,” claims the authors.

Ensure that the room you choose is the right size to accommodate your daily work activities and your storage needs. If you’ve found a room in a suitable location and it gets plenty of natural light but lacks storage, consider adding built-ins with cupboards and shelves.

Finally, if you hope to take the home office tax deduction you’ll need to ensure that your office is distinctly separate from the personal spaces of the home. Sure, it’s ok if you use the dining room for your office as long as you don’t also eat there. Keep this in mind as you decorate the office as well – if an item shouldn’t be in an off-premise office, it shouldn’t be in your home office either.

Getting wired

Determining your tech needs should be high on the list of things to do in advance of moving in to the new house. First, figure out what you require in a home network (the basics, of course, include a broadband modem and wireless router), but you may also need to connect other devices and depending on what you do for a living you may need a dedicated land-line telephone and perhaps cable TV service. If you’re fortunate to have some smart devices in the home, you’ll need to consider a home automation hub, cloud storage and more.

All those cords and wires can be distracting so shop for storage or camouflage solutions as well.

Lighting

While it’s important to have as much natural light as possible, depending on what you do for a living you’ll want to add additional lighting as well. Look for lighting solutions that will help reduce eye-strain. The experts at Remodelista suggest thinking of your office lighting as “akin to dressing for a climate with changeable weather–it’s all about layering.” Use one light to illuminate the entire office and then start layering in other fixtures according to your typical daily tasks, from filing to working on your computer.

These solutions can include everything from desk lamps to sconces to floor lamps, depending on your needs.

Furniture

Furnishings are highly personal, even in an office setting. Since you’ll be spending most of your time at your desk, however, let’s start there. Will you stand or sit? With all of the recent studies claiming that sitting is killing us, many are switching to stand-up desks, so this is a valid question. And, since you have the luxury of planning your ideal office right now, it’s something to consider.

Thankfully, if you can’t decide whether to sit or stand, you don’t have to – there are desks designed to allow you to do either. The bottom line with furnishings is that you’ll need to decide what you require and then ensure that the furniture will fit in the room (along with the storage solutions you’ve chosen).

Aside from a desk and chair, you may need filing cabinets, shelves, display space (if you see clients in the home) and more. Hopefully, you measured the room while you accompanied the home inspector (or any other visit you made) so that you can get this hammered out before you move in.

TIP: Do not use your credit card or any other type of credit to furnish the office or any other room in the home before closing escrow. Your lender will likely perform what is known as a “soft pull” of your credit just before closing. If your finances have changed in any way since you applied for the mortgage, your loan may not go through (at the last minute), which makes all thoughts of designing a home office for this home moot.

 

 

What You Need to Know About Fall Home Sales

Good for you if you deliberately sat out the summer madness that is inherent in the current housing market. If you’re serious about buying a home, you’re hopefully about to save a huge gob of money.

There’s another new housing market study out that confirms some well-known facts (for instance, “home prices peak in June and July”) and some tidbits that real estate consumers may not know.

Of course, it’s a no-brainer that homes sales tend to drop during fall and winter, but did you know that home prices do the same? Indeed they do — a nationwide average of 3 percent which is a reduction of more than $7,000 (based on the current nationwide median existing home price). Remember, all real estate is local, so your “mileage” may vary.

Let’s take a look at a few more reasons why shopping for a home in the fall may just be one of the best decisions you’ve ever made.

You’ll get a better deal now

RealtyTrac, a real estate data analytics firm, studied more than 30 million home sales dating back to 2000 and found that homebuyers get the best deal in October. In fact, the study finds that the average sales price in October, nationwide, is 2.6 percent lower than average market value. Coming in behind October, the best months to buy a home, according to this study, are December, January, February and July.

The worst month to buy a home? April homebuyers, according to the RealtyTrac study, paid 1.2 percent more than estimated market value.

It’s a better time for first-time homebuyers

Move-up buyers – you know, all those folks you were competing and losing against just a few months ago – are in their new homes. In fact, one of the big real estate information services recently announced that the market consists of mainly first-time buyers right now. When you aren’t competing against someone who has more money than you (in the form of the proceeds from their current home), you’re on a more level playing field, and that’s always a good thing.

This isn’t to say you won’t still need to act quickly when you find a home you want to purchase, because you will. But overall, your competition is in the same boat as you.

Sellers are motivated

Less competition among buyers make sellers nervous. They want out of the home, hopefully before the winter holidays, so they’re more motivated to negotiate. While you should still come in with your highest and best offer in a seller’s market, we can be a bit more flexible in the contract’s terms. This is something we can discuss when the time comes.

The whole industry is idle so you’ll get more and better attention

From home inspectors to lenders to title companies and even movers, business takes somewhat of a breather in fall, so your deal will get more attention. The same can’t be said for winter, when the holidays role around and most folks involved with the home sale process take time off.

Vendors offer year-end deals

Air-conditioning techs and pool companies, especially, are entering their slowest time of the year so they offer big savings on their services and the homebuyer who needs these services is the beneficiary.

Shopping conditions are more pleasant – and helpful

Unlike shopping for a home in winter, in autumn you can still catch a glimpse of where the perennials are planted and learn how the deciduous trees in the landscape look when they have foliage. And, unlike summer home shopping, you won’t be sweating as you schlep from home to home.

It may not be this pleasant next month, however as we slip out of daylight savings time, the rains begin and temperatures begin to chill.