2017: What to expect in the housing market

2017 real estate market forecast

With the new year knocking on the door, one of the questions I hear most frequently is where I think the real estate market is headed in 2017. Buyers, especially, want to know if the market will morph into one a bit more favorable to their interests.

Ah, if only I had a crystal ball and could cut right to the chase to tell you what’s going to happen in the 2017 real estate market. Since we don’t have a handy tool to help us discern the future, we rely on experts in various economic niches for our housing market prognostications every year. Are they always right? Nope, but they do get awfully close.

Personally, I combine what I learn from the economic forecasts with my experience every day as a boots-on-the-ground real estate professional and with our Multiple Listing Service statistics. So, let’s dive in.

Interest rates

As you know, the Feds raised the federal funds interest rates earlier this month. While it was an increase of only a quarter of a percentage point they did say to expect a couple more rate hikes in 2017. So, how does this affect the real estate consumer?

Yes, those with an adjustable rate mortgage will take a hit, as will homeowners with an adjustable rate home equity line of credit, or HELOC, tied to the prime rate (albeit a smaller, hardly noticeable hit in most cases).

If you’re planning on purchasing a home, on the other hand, and need a mortgage, while the feds’ move should encourage you to act more quickly than you’d planned, don’t let it scare you off completely. Even with the interest rate hike in December, mortgage rates are still at historic lows right now, so jump into the market and get that dream home.

If the feds make good on the promise of additional interest rate hikes, homebuyers on tight budgets that choose to wait later in 2017 to buy a home may find themselves knocked out of the market. Even a half a percent increase on a 30-year fixed $250,000 mortgage could increase the annual payment more than $850 according to Fortune.com’s Kerry Close.

Put another way, if mortgage interest rates go from 4 percent to 4.25 percent, 965,000 potential homebuyers will be leaving the buyer pool, according to the National Association of Home Builders.

The good news, however, is that “There’s a lot that buyers can do to mitigate the effects of rising rates, including looking for lower-priced homes, putting more money down or changing term lengths on a mortgage’s fixed-rate component,” Jonathan Smoke, chief economist at realtor.com tells Inman.com’s Amber Taufen.

How about home prices in 2017?

That’s the burning question for folks who plan on buying a home down the road. By the end of November, the median sales price of a home was $271,400, up 7.7 percent from last year.

Housing market experts predict that although they won’t rise as quickly as they did this past year, home prices will rise about 3.5 percent in 2017. So, as long as the aforementioned interest rates stay put, there’s a bit of good news for you if you need to wait until later in the year to purchase.

The bad news is for those on tight budgets, at least according to a study by the National Association of Home Builders (NAHB). A $1,000 hike in the median price of new homes, they claim, would knock nearly 153,000 potential homeowners out of the market.

If you’re planning on upsizing, fortune.com’s Close says you’re sitting in the sweet spot. Small home prices are expected to rise faster than larger ones and city dwellers can expect more home value appreciation than those in the outlying metro regions. In other words, expect your small home to be the belle of the neighborhood real estate market when it’s listed.

Which leaves first-time buyers and those who hope to downsize in a not-so-sweet spot. Expect lots of competition from other buyers for these smaller homes in the lower price ranges. In fact, prepare for it by cementing your financing and being ready to submit an offer immediately. We can help you with the preparation part – feel free to give us a call.

That elusive inventory problem

Much of the blame for the low inventory of available homes (causing home prices to rise) goes to the lack of new home construction across the country. There was some good news on that front, however, when December’s National Association of Home Builders/Wells Fargo Housing Market Index rose to the highest level since summer 2005. This measure of homebuilder confidence is good news for homebuyers as long as it translates into new housing starts.

A lot of it boils down to “it all depends on . . .”

The housing market’s strength depends on a number of variables, one of the most important of which is the health of the job market. Although it’s better than it was during the recession, and although president-elect Trump is promising to amp it up, hiring is still not quite where we’d like to see it. This is something that Fed policy makers will look at when deciding whether or not to raise rates again.

I know this is a lot to consider as you think about your future home-buying prospects but, really, there’s nothing you can do about anything that will impact the housing market. My best advice to you is to jump in as soon as you can.

Aging in place? 7 things to consider

baby boomer homebuying

Talking about older adults is a challenge. It’s not like talking about teenagers, or toddlers, who all pretty much like the same things. The group includes a broad range of ages, interests and living situations.

Younger boomers sometimes bristle at being called seniors, especially if you call them that while they’re on a road trip on their Harleys or rock climbing on the Costa Brava. To them, “seniors” applies to older folks who are slowing down and find it a bit difficult to get around.

Regardless of what stage of aging you’re in, you, like many older adults in the U.S. may be considering aging in place, either the place you’re currently living, or buying one with a friendlier layout. If so, we invite you to read our list of things you may want to consider when compiling your wish list for that home.

Single level living is easier

A single-story home is the most obvious requirement for an older adult living on his or her own. Even younger Baby Boomers find that traveling up a flight of stairs sometimes hurts the knees. For older folks, not only may stairs be difficult or impossible to navigate, there is the real danger of slipping and falling.

Keep an eye on future mobility

Most hallways in homes are 36 inches in width, which is far too narrow for someone in a wheelchair. In an existing home, knocking out a wall to widen a hallway may be a major project. If you are purchasing a home, ensure that hallways are at least 42 inches wide – 48 inches is ideal, according to the experts with the National Association of the Remodeling Industry (NARI).

Install a ramp to compensate for changes in level if you have trouble navigating. Curved ramps aren’t recommended, according to the experts at Drummond House Plans, as steering a walker, wheelchair or scooter may be challenging on a curved surface.

Make the bathroom user-friendly

Over 230,000 people are injured in the bathroom each year, according to the Centers for Disease Control (CDC). Two-thirds of these accidents occur in the shower. Making a senior-friendly bathroom is as easy as applying non-skid strips or a rubber mat on the shower floor and grab bars inside the tub. There are, however, other things you can do for extra security, according to the National Aging in Place Council (NAIPC):

  • Remodel the shower so that it’s possible to roll into it in a wheelchair
  • Lower the bathroom sink
  • Install an elevated toilet.


Traditional kitchens are the most challenging rooms for the wheelchair-bound to navigate. Even if you currently don’t use a wheelchair, if you plan to age in place, you may want to consider the possibility that one may be in your future.

The specialists at NAIPC have several suggestions on how to make the kitchen user-friendly for seniors:

  • Install cabinet hardware that is easy to grip.
  • Provide at least one 34-inch tall countertop with no obstructions beneath it. This allows the senior to sit while performing kitchen chores.
  • Elevate the dishwasher one foot off the ground.


Install a walk-in closet with a doorway that is at least 36 inches wide. To make them easier to reach, lower the shelves and clothing bars. Move the light switch inside the closet to within 36 to 40 inches from the floor.

For those middle-of-the-night trips to the bathroom, light the pathway from the bedroom to the bathroom. This can be accomplished with a nightlight or with motion sensor lighting. Large home improvement stores carry nightlights with a kick plate that the user can turn on with the touch of a toe.


Good lighting is essential for safety if you plan on aging in place. There’s a delicate balance, however, between adequate lighting and creating glare.

The CDC recommends florescent bulbs while the National Association of the Remodeling Industry (NARI) says that LED bulbs are longer lasting than traditional or florescent bulbs. To avoid glare, NARI suggests installing easy-access dimmer switches, pendant lights and under-cabinet lighting.

If you plan on renovating your current home rather than purchase another, be sure to use a contractor that holds the Certified Aging in Place Specialist (CAPS) designation.

If you’ll be purchasing, we’re happy to help you find the perfect home in which to age in place.

Your new home: you put a ring on it, now you need to maintain it

costs of deferred maintenance

Don’t you find it odd that so many people take better care of their cars than they do their homes? While maintaining your automobile is important, your home is far more valuable and an investment equally worth protecting.

Sadly, most problems in a home didn’t happen overnight but started out small and, neglected over time, reached the point where the price to repair them became quite costly. These are homes that suffer from what real estate experts call “deferred maintenance,” and they sell for far less than well-maintained homes.

Not only does deferred maintenance drag down the value of a home (by up to 10 percent, according to the folks at House Logic), but it may cause health and safety issues as well. So, even if you aren’t planning on selling the home for years, it’s important to get on a maintenance schedule and stick to it.

It’s mainly about water

“Water causes more damage to homes than any other single deferred maintenance issue,” according to Handyman Hub in Denver. As evidence, they explain how repairing a leaky wax ring around a toilet, if caught early, costs less than $100.

Allow the repair to wait, however, and the cost of repair can balloon to thousands, and may include pulling up the toilet and possibly the vanity, the floorcovering and then replacing the subfloor, all the while crossing your fingers that the joists aren’t water damaged as well.

Frank Lesh, former president of the American Society of Home Inspectors tells House Logic how cracked caulk around a window, which costs less than $4 to repair, can quckly blossom into a $5,000 repair bill if moisture seeps into the sheathing causing rot and mold.

The moral of these stories? If anything on or in the home can be damaged by water, inspect it as often as possible.

Make a schedule

Most home maintenance experts agree that regularly inspecting the home is the key to finding small problems before they swell into huge ones. Once your inspections become habit you won’t need to worry about remembering to do them. Until then, make a schedule and stick to it. The U.S. Department of Housing and Urban Development (HUD) offers an excellent schedule on its website.

The most important home systems to maintain are the ones that cost the most to replace or repair. For example, roofing contractors suggest that you perform a routine roof inspection twice a year: at the beginning of spring and again in early fall. This may seem like a lot of time spent on just one aspect of the home, but when you consider that a new roof may cost you up to $15,000 it’s worth it to take the time to inspect it.

While you’re up there, clean out the gutters and downspout to make sure that water is directed away from the home. This multi-tasking on home maintenance chores will save you time as well as money.

Then there are tasks that need to be performed more often, such as changing the HVAC filter and dropping a few ice cubes into the garbage disposer to clean the blades (monthly).

Annual projects include checking sealants and caulking (important to prevent water damage) and checking the water heater for leaks. Again, HUD’s home maintenance schedule is a good resource.

While some repairs required to keep the home maintained require the services of a professional, the DIY enthusiast will be pleased to know that lots of them are easy and inexpensive DIY projects.

 The one cost of purchasing a home that often shocks first-time buyers

closing costs can be a shock

Ok, so you know you need a big chunk of cash to pay the lender for a down payment on that house you want to buy. You may even know about the earnest money deposit; that smaller chunk of money that your real estate agent told you about. And, sure, somewhere along the line the words “closing costs” may have been mentioned but when you see the amount necessary to close the loan, printed in black and white, it’s a whole other story for many homebuyers.


As a rule of thumb, closing costs run 2 to 5 percent of the loan amount, so if you’re using an FHA-backed loan, your closing costs may be comparable to your down payment.

So, if you are obtaining a loan for $175,000 and you qualify for an FHA 5 percent down payment loan, you will be required to pay $8,750 for a down payment and perhaps even that much for closing costs. Did anyone tell you it may cost you $17,500 IN CASH to buy a house?

The truth is, many first-time buyers spend years saving up to pay for the down payment while closing costs come as a complete surprise.

What are closing costs?

When you pay your closing costs you’re basically paying for all of the services you received during the transaction. The seller, pays as well, such as for the real estate broker’s services. In fact, who pays for what at closing varies widely across the country but some items are standard. Some of the more common fees that buyers pay include:

  • A fee for pulling your credit report
  • Appraisal
  • Down payment
  • Escrow impounds (money kept in escrow to pay for your homeowners insurance and property taxes)
  • FHA Up-Front Mortgage Insurance Premium
  • Home inspection (if not paid at the time of service)
  • Loan origination fee
  • Notary fees
  • Origination fee (this is the lender’s fee for granting you the loan)
  • Points, or loan discount fees, if you’ve decided to purchase them
  • Prepaid interest
  • Private mortgage insurance premium
  • Recording the deed
  • Title insurance

Lender disclosure requirements when it comes to closing costs

By law, lenders must disclose an estimate of loan costs within three days of the submission of a completed loan application. Then, three days before closing, the lender supplies the borrower with a Closing Disclosure. While the fees listed on the Loan Estimate may increase or decrease before closing, the Closing Disclosure is the final word.

It’s important to compare the two documents and look for changes. If you have any questions or concerns, call the lender immediately.

How to pay less at closing

Many sellers are amenable to paying the buyer’s closing costs, or at least part of them. If you’re cash-crunched, let your agent know so he or she can negotiate on your behalf on the closing costs.

If you’re purchasing a home using the Veteran’s Administration (VA) mortgage, there are certain closing costs that you are not allowed to pay. Some of these include:

  • Attorney fee
  • Document
  • Escrow
  • Processing
  • Tax Service
  • Underwriting

Plus, there is no cap on how much of the closing costs a seller is allowed to pay. So, whether the seller pays them or the lender offers a credit to help pay for them, this is yet another money-saving feature of the VA loan.

The Consumer Financial Protection Bureau’s website has lots of helpful information about the closing process, including a copy of the Closing Disclosure Form and an explanation of how to compare it to the estimate, and a closing checklist.

Be Safe This Holiday Season With These Handy Tips

Holiday safety tips

The winter holidays – love them or not – are a time to celebrate. With celebration, however, often comes complacency. It’s a time of year when we are more prone to relax and let our guard down, all in the spirit of the season.

As wonderful as the holidays are, there is danger lurking behind some of the more common aspects of our celebrations. But there doesn’t have to be. With a little forethought, preparation and knowledge, the winter holidays can be safe and worry-free.

Keep the kids safe

This is the time to remind children of the family’s basic rules, such as not speaking with strangers. Here are a few safety reminders to keep in mind when shopping with young children:

  • Select a meeting place in the event you become separated.
  • Teach your children how to identify mall security personnel and how to ask for help. If they can’t find security, let them know they should seek help from a store clerk.
  • Remind them to never leave the mall without a parent.

Safety at home includes hanging ornament, lights and other decorations out of the reach of little ones, keep the menorah out of reach and don’t forget that mistletoe and holly berries are toxic and dreidel and other game pieces are choking hazards.

Holiday shopping safety

Unfortunately, crime rates tick upward during the holidays. “We call it good cheer,” says News 3 Las Vegas. “Criminals call it complacency.”

Here are some tips to keep you out of harm’s way while shopping:

  • If shopping late in the day, park in an area that will be well-lit after dark.
  • Try not to shop alone. Thieves tend to target loners.
  • Walk with a purpose, paying attention to what’s going on around you.
  • Your car keys serve a number of safety purposes: carry them with the end of the keys pointing out to be used as a weapon. Sound the car’s alarm if anyone suspicious approaches you.
  • Check the backseat and under the car before entering it.
  • Don’t leave previous purchases, cell phones or other valuables on the seats, in plain sight. Lock everything of value in the trunk.

Fire Prevention

According to the National Fire Protection Association (NFPA), fire departments respond to an average of 230 Christmas tree fires each year. These fires caused an average of 22 injuries, 6 deaths and more than $18 million in property damage.

A fresh tree is less likely to burn than a dried-out tree so water yours daily. Additional holiday tree safety tips include:

  • Keep the tree at least three feet away from a fireplace and heat sources.
  • Before putting lights on the tree, inspect each string for exposed wires, frayed wires and broken sockets. If you have pets that like to chew on wires, inspect the strands frequently throughout the season.
  • If you need to use an extension cord, don’t overload it and don’t run it under a rug.

Candles also play a prominent role in our holiday celebrations, especially Hanukkah. The NFPA estimates that each year, candles are responsible for 11,640 home fires. Candle safety includes not leaving them unattended while they are burning. Additional tips include:

  • Don’t use candles to decorate the tree or wreath. Use battery-operated candles instead.
  • Keep candles away from curtains.
  • Ensure that lit candles are out of the reach of children and pets.

Speaking of pets

The holidays bring with them some special dangers for your pets. The ASPCA offers additional pet safety tips to keep in mind during the holidays:

  • Poinsettias, holly, pine needles and mistletoe are poisonous to pets.
  • Tinsel, swallowed, means a trip to the emergency vet.
  • Don’t allow the dog or cat to drink from the tree stand. It may contain fertilizers and bacteria.
  • Secure the tree to ensure it doesn’t topple over when the kitty decides to take a hike up the trunk.
  • Dogs love chocolate. Chocolate doesn’t love dogs. Place the chocolate coins in their foil wrapping and net bags out of Fido’s reach.

Keep these tips in mind and, before you know it, the holidays will be a happy memory, everyone will be safe and life will get back to normal.

4 Important Aspects of the Luxury Home Search

how to buy a luxury home

From urban penthouses with amazing views to rural equestrian estates, luxury home settings can be beyond spectacular. Right now, the luxury market in our state is full of homes with prices that start just under $1 million to more than $24 million. Prices at the high end of the market, by the way, are rising only half as fast as those in the lower ranges according to a new study, published at Inman.com.

This only makes sense when one takes into account the law of supply and demand. Lower priced homes are at a premium right now and demand is still high. Those shopping for luxury homes can take their time, which is great news. Sure, it may sound trite, but it’s definitely true that now is the time to jump into the luxury home market.

If you’re considering purchasing a high-end home, consider the following:

1.You’ll need to develop a solid plan

Understand what you want in your new home before touring properties. If it’s a view you crave, looking at homes on the flats will be a waste of your time. If you have a particular architectural style in mind, let your agent know so he or she can search strategically. Knowing what you want is half the battle, so get clear on your needs and wants and we can take it from there.

2. Give yourself enough time

Evaluating high-end property isn’t something that should be rushed. Expect to take at least an hour or two to fully tour each home. You’ll want to pay attention to architectural aspects, amenities and, of course, the location.

Take a look at the disclosures about any homes that you’re interested in. Have your agent compile a market analysis, comparing the property you like to others that have sold recently. This way, you’ll know how to structure your offer to purchase and how much to offer.

If you won’t be paying cash for the home, understand that the lending process (see below) is more time consuming than you experienced when you purchased lower priced homes and the home inspection will take longer than it does for more conventional homes.

3. Cash or credit?

If you won’t be paying cash for the home you’ll most likely need to obtain a jumbo loan. Everything about these loans, from the application to the appraisal, takes longer than a standard loan. Be prepared to put down at least 35 and as much as 50 percent of the loan amount as a down payment, hand over volumes of financial paperwork and then “hurry up and wait.”

4. Don’t skip the home inspection

Regardless of how well-maintained the home appears you must have it professionally inspected. While one can never know what lurks behind the walls in a home (without opening them up!) the peace of mind that a professional inspector can provide is priceless.

Home inspections for luxury homes typically take longer and may cost more than a standard inspection. The most obvious reason for this is that high-end homes are larger, with more rooms and more systems. Consider just the HVAC system in a luxury home, for instance. They typically contain numerous systems with multiple zone controls that are quite complex.

A final word of advice: You may start your luxury home search on the Internet, as the majority of home buyers do, but keep in mind that not all luxury homeowners list their homes in the MLS. In fact, many don’t, for a variety of reasons.

We typically have access to even those properties that aren’t formally listed in the MLS, so contact us if there is something particular you have in mind.



Ready to Ditch the Carpet? Consider These Alternatives

Wood floors

It’s a brave homebuyer who decides to go through with the purchase of a home, despite an ugly, torn, tattered and/or dirty carpet. Floor covering can be pricey, especially if you pine for what many homebuyers do – hardwood floors.

Some of today’s flooring alternatives, while just as attractive as hardwood, aren’t quite as expensive and, depending on your circumstances, there’s one that may be ideal for you.


If you think concrete floors are suited only to lofts or industrial décor schemes, think again. New products on the market include ways to make your concrete floor look like hardwood, travertine, marble and more. Or, if you prefer, add a colored stain and shine it to a high gloss.

Advantages to concrete floors include that they are a snap to keep clean and, when sealed properly, they resist moisture. Finishing the floor has become a popular DIY project and far less expensive than installing other floor covering choices.

Finally, concrete is eco-friendly. It doesn’t “deplete natural resources, requires less energy than other floor types to produce, and is made (poured) locally,” according to HGTV’s Kim Hildenbrand. Indoor air quality with concrete floors is far superior to that in homes with carpet as concrete doesn’t mold, doesn’t hold allergens and contains no volatile organic compounds (VOC).

Check out gorgeous examples of acid stained concrete floors online at HGTV, concretenetwork.com and Pinterest.


As chameleon-like as concrete is for flooring, so is cork, a relative newcomer to the flooring market. “Cutting-edge technology has allowed manufacturers to offer flooring with the amazing look of hardwood or marble, while keeping all the benefits of cork,” claims Marie Proeller on BobVila.com.

Fans of cork floors say that what convinced them to go with the option is how soft the surface feels underfoot. So, if you do a lot of standing, say, in the kitchen, cork may just be your ideal choice. They also like that, since cork is a natural insulator, they spend less on heating and cooling their homes.

Cork — the bark of a tree that renews after its been removed – is also an eco-friendly material.

If, on the other hand, you have pets, kids or just a very busy household, cork may not be a good choice. Because it’s such a soft material, it is easily scratched by pet nails and damaged by anything dropped onto it. Even furniture may cause permanent dents in the flooring.

View images of cork floors on Pinterest and HGTV.


Laminate is one of the most popular flooring choices in the U.S. mostly because it provides the look of hardwood without the cost. It is the ideal flooring material for low-traffic homes without children or pets.

Laminate is basically a photograph of wood, bonded to particle board. It comes in a wide array of colors and widths.

One of the biggest complaints about laminate is that, despite manufacturers claims to the contrary, it is a bit high maintenance. Sweeping the floor is not recommended as the dirt and dust may scratch the surface. You’ll need to vacuum it to get it clean and then mop, carefully. Although laminate resists stains, it is not waterproof. Spills that aren’t cleaned immediately will soak into the material, causing it to warp and pull away from adjoining planks.


Linoleum is one of the oldest flooring materials still in use. First manufactured in the mid-1800s, as ship deck covering, it quickly gained popularity as it was installed in large commercial buildings.

Homeowners that have linoleum floors love it for its durability; it’s not at all unusual for one of these floors to last up to 40 years. It is also like cork in that it tends to be soft underfoot and it’s an eco-friendly option (made from linseed oil) and it’s biodegradable once removed from the home. Finally, linoleum doesn’t emit VOCs.

The downside to these floors is that, again, like cork, the material is soft and has a tendency to tear and scratch easily. Also, if it’s not sealed, you’ll need to polish and buff it, making it a bit high maintenance for many homeowners.


The tile category of flooring includes a number of different materials, including stone, ceramic and porcelain.

Stone floors are ideal for homes in warm climates as they remain cool, regardless of air temperature Stone is nonporous and won’t harbor allergens, so it’s easier on those prone to allergies than carpet and even hardwood. They are also worth considering if you have a busy household with pets and children as they hold up against even the harshest abuse.

Stone floors are expensive to purchase and even more expensive to install. They are also cold, slippery when wet and, because it’s such a hard surface, dangerous to anyone that actually falls on them.

Ceramic, marble and porcelain tile flooring options have come a long way in the past decade. You can now purchase tile wood-look planks as well as tile that resembles stone. Tile flooring, if done right, may add to the value of the home, according to Realtor.com

Tile is ideal for families and pets as it generally doesn’t scratch (although ceramic is a bit more fragile than porcelain) and it requires little maintenance. Homeowners often complain, however, that the surface is cold and hard and, if the tile is glazed, it may become slippery when wet.


Of all the flooring choices available, vinyl, known as a “synthetic cousin of linoleum,” has the worst reputation for emitting VOCs, at least immediately after it’s installed. Today, however, you’ll find vinyl manufacturers who use products that have achieved Indoor Air Quality Certification (Naturcor is one).

Luxury vinyl plank flooring, especially in a faux wood pattern, is one of the biggest sellers over the past few years, according to flooring specialists. Homeowners love their vinyl floors for being water and stain resistant, easy to clean and durable.

Vinyl flooring comes in sheet, tile and, as mentioned, plank styles that are either glued down or snapped together, making installation the ideal DIY project for a handy homeowner.

How to buy a home after bankruptcy



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.