Let’s fix that credit score

Although the homebuying frenzy continues, millions of Americans whose employment was impacted by the pandemic are being left out.

Without a job, maintaining a decent credit score can be challenging. However, you will get back on your feet and there are ways to fix the damage so that you can buy that dream home.

Credit score basics

“The goal of a credit score is to provide a quantifiable prediction of the likelihood of default in the next 24 months,” according to Thomas Wade with the American Action Forum.

In other words, it determines a borrower’s creditworthiness.

The scale of credit scores ranges from 300, the worst possible, to 850, “… considered the unicorn of the financial world: a perfect credit score,” according to Stefan Lembo Stolba at experian.com.

Only 1.2% of credit scores from FICO® have reached that magic number, so don’t feel bad if you aren’t among them.

Scores that fall below 850, are grouped as follows:

  • 300-629 Poor
  • 630-689 Fair
  • 690-719 Good
  • 720-850 Excellent

FICO, short for Fair Isaac Corporation is the data analyst that determines these scores. They do so by analyzing our credit reports from the “big three” credit reporting agencies, Experian, Equifax and TransUnion.

The most important thing to understand about your FICO score is that it’s fluid, moving up and down according to how you use credit.

Rule number one to raise your credit score

The easiest way to increase your FICO score is by avoiding late payments. Every month, pay your bills on time.

If you think this sounds too simple to be true, consider this:

“… someone with an average credit rating of 707 can raise their score by as much as 20 points by paying all their bills on time for one month,”

according to Jessica Seid, CNN/Money staff writer.

The credit card trap

There are tricks to using credit cards and loans when it comes to trying to repair your credit. These tricks are evident when we consider how the reporting agencies look at credit card use.

  • Age of credit–Older credit, whether cards or loans, makes the potential borrower appear less risky. New credit can ding your FICO score by as much as 10 points.
  • Balances– Maxed out credit cards can cause up to a 70 point reduction on your credit score. The agencies want to see available credit.
  • Lack of accounts–If you have no credit card or loans, credit agencies will wonder why.

If you’ve been caught in the credit trap, start paying down your high balances first. Don’t close any credit cards.

No credit score?

A 2019 report from the Consumer Financial Protection Bureau (CFPB) showed that “22% of Americans Don’t Have a Credit Score,” according to Matt Frankel, CFP at fool.com.

Because they have no history of credit use, the credit reporting agencies consider these people credit risks.

If you are among this group, you’ll want to do the opposite of those with low scores. Get and use a credit card, ensuring that you pay the entire balance, on time, every month.

Tip: Obtain a secured credit card from a company that reports to the credit reporting agencies.

How to fix your credit score, step-by-step

  • Obtain your reports from all three of the major credit reporting agencies. Americans are entitled to one free credit report from each, annually, from annualcreditreport.com. For additional information on the free credit reports, visit the Federal Trade Commission’s website.
  • Comb through the reports looking for errors. Dispute any that you find. The FTC website shows you how.
  • Vow to pay your bills when due.
  • Reduce your credit card balances.
  • Since older, seasoned credit is more attractive to credit agencies, don’t let old cards go stale. Use them, but remember to pay off the balance when due.
  • Request an increase to your credit limits. Avoid the temptation to max out the additional credit, though.

Selling under the influence of kids

Come on, admit it: You started watching those DIY home selling and staging TV shows the minute you made the decision to sell.

You’re not alone. But you should keep in mind that those amazing TV stagers have unlimited budgets and tons of people to help them.

The shows don’t reflect the reality of the basic American home seller’s situation.

Depending on how you’ve maintained the home since you bought it, preparing it for the market can be expensive. All the repairs, the painting, the cleaning and decluttering – it’s a lot of work as well.

Add on the price of hiring a professional home stager and we’re talking some big money coming out of your pocket.

Making your home the belle of the local real estate market is, however, one of the most important things you can do to appeal to a broad range of buyers and make top dollar at the closing table.

Enter: Kids

The most annoying part of selling a home when you have children is having to keep it tidy and staged while it’s on the market.

The second most annoying aspect is those potential buyers who ask for a last-minute showing.

We’ll get to some tips for the latter in a minute. First, let’s talk about staging a home that harbors children.

Plan for chaos

Those last-minute showing requests are a pain. But if you truly want to get the home sold you need to accommodate buyers–and get the kids on board.

Consider the following tips:

Determine how long it will take you to tidy up the home in time for a buyer to do a walk-through. Then, ask us to put a notice in the MLS that you require that much notice for showings.

For instance, if it will take you an hour, we’ll let buyers’ agents know that you need an hour’s notice for showings.

This will give you at least enough time to cover the basics of pick-up, cleaning and getting yourself and the kids out of the home.

Keep the kids distracted while you tidy up. Unless, of course, your kids are immensely helpful and quick. (If so, care to trade?) Otherwise, park them in front of the TV so they stay put and don’t create new messes.

Purchase some laundry baskets from the dollar store and use them to stash toys, mail, dirty dishes and all the other clutter you encounter as you run through the home, tidying up. Then, throw the baskets in the trunk of the car to get them out of sight.

One online parent suggests that you check every toilet before leaving the house. Kids – potty – flush – if yours are like mine when they were little, they tend to skip the latter.

Prioritize

Let’s take a list of the basics of straightening up when you have limited time. These tasks are prioritized from the most important to the lease.

Start in the kitchen:

  • Move the dirty dishes from the sink to the dishwasher and scrub the sink.
  • Remove clutter from the countertops and then wipe them clean.
  • Wipe down the stove.
  • Take out the trash.
  • Sweep the floor.

Move on to the bathroom(s):

  • Flush the toilet and put down the toilet seat.
  • Clear the clutter from the countertops and wipe them down.
  • Clean the sink and wipe water spots off the faucet.
  • Take out the trash.
  • Replace soiled towels with fresh ones.
  • Sweep the floor.

Work on the entry way:

  • If you have a table in the entry way, remove any clutter and dust.
  • Remove all clutter from the entryway and the areas of the home visible from it.

Turn your attention to the bedrooms:

  • If you haven’t made the beds yet, do so now.
  • Pick up toys and stash as many as possible out-of-sight
  • Remove all clutter.

On your way out the door, turn on all lights in the home (including in the closets) and open all the window coverings.

Count heads to ensure you aren’t leaving any little ones behind and head to the park, congratulating your babies on a job well-done.

3 tips to make buying a home less stressful

Buying your first home is exciting. At first.

If you’re like most, at some point the anxiety creeps in. It’s normal. As with anything new, you have questions, you may have fears and, at times, may even feel stressed out. Even repeat homebuyers feel anxious during the homebuying process.

“As it turns out, many Americans, about 40%, say buying a new home is the most stressful event in modern life …” according to housingwire.com’s Kelsey Ramirez, citing a survey by a nation-wide real estate website.

Thirty-three percent of those surveyed said they were reduced to tears at some point during the homebuying process.

It all boils down to a lack of confidence-the same malady that afflicts all of us when learning a new process.

There are certain points in the process that are more stressful than others so today we’ll introduce you to those and point you to where you can learn more.

Learn all you can about the mortgage process

Surveys say that most consumers know very little about mortgages. For instance, “Many people believe that if you don’t have at least 20% down, you can’t buy a home,” according to the folks at rocketmortgage.com.

It’s a myth. There are many home loans on the market with only a 3% down payment requirement. Some have zero down payment terms.

Rules for qualifying for a mortgage are also misunderstood. Many consumers are under the impression that the qualification process is stricter than it is. Yet, when asked about qualification standards, such as debt-to-income ratio, about half of the buyers surveyed didn’t know anything about them.

If you don’t think you can afford a home, you may be laboring under some common misconceptions. When you clear those up, you’ll go into the mortgage application process far more confidently. Here are some websites to help you get up to speed:

Once you’re familiar with the process, start searching for a lender. Ask friends, family and colleagues who they used (if they had a good experience).

Then, start applying for mortgages, keeping an eye out for the lender that is the best at getting back to you promptly and that is able to explain things in easy-to-understand terms.

Go ahead and apply to several. You are under no obligation if they say yes and, it gives you a chance to compare lenders to find the best rates and terms.

If you’re worried about your credit score from all of credit pulls, don’t be. “Fair Isaac Corp. (FICO), the creator of the FICO model, states that multiple mortgage inquiries that occur within 30 days of one another do not affect your FICO score,” according to Greg Depersio at investopedia.com.

To be safe, according to Craig Berry at themortgagereports.com, try to submit all of your loan applications within a two week period.

Stressed about the down payment?

Earlier, we discussed the down payment myth. For some homebuyers, however, even a 3% down payment is a fortune. It shouldn’t stop you from pursuing your dream of homeownership, however.

If you serve, or have served in our nation’s military, or you are the surviving spouse of someone who served, you may qualify for a U.S. Department of Veterans Affairs (VA) home loan. These loans require zero down payment. Learn more about this program at va.gov.

The U.S. Department of Agriculture (USDA) also offers a no-down mortgage for those who wish to purchase in eligible rural areas. To learn if the home you have your eye on is considered “eligible,” enter the address here.

The USDA offers several programs and you can learn more about them online at usda.gov.

You’ll can also apply for the various municipality, state and federal down payment assistance programs. Ask your lender for a list or search online.

Hire the right real estate agent

Interview real estate agents carefully to ensure that you find the right one for your needs. After all, your real estate agent will be your advocate during the homebuying process; you’ll be doing a lot of leaning on your agent.

During the interviews, ask questions, share your concerns and pay attention to the responses. Choose someone who understands how stressful the process can be and helps put you at ease.

It has been said that “knowledge is power.” The more you know about the process of buying a home, the more empowered and less stressed you’ll feel.

Top 5 ways to lose money on your home sale

It doesn’t take much to turn off buyers. Right now, however, there are so many in the market, clamoring for homes in decent areas and in good condition, that homes are practically selling themselves.

Getting the most money possible for your home, however, requires a bit of work. Skipping the following, basic tips, is like throwing money away.

Let’s see if we can step up your home’s game so you can reap maximum rewards.

1. Ignore your home’s appearance from the curb

“Curb appeal” isn’t just a concept from home and garden TV shows; it’s actually what gets homebuyers out of the car and into the house.

Stand at the curb and take a look at the exterior of your home and the landscaping. Like what you see?

If not, a little bit of elbow grease can change that.

If your home needs painting, paint it. Stick with neutral colors, such as gray, taupe and white, according to the experts at Benjamin Moore.

For a pop of interest, paint the door a coordinating color. Black is popular right now, but red and blue are attractive as well.

Next, turn your attention to the landscaping. Just as you’ll need to do to the interior, clean the landscaping of any debris. If the lawn isn’t dormant, mow it and add fresh mulch to the beds.

Then, add attractive plants (even if they’re potted). Ensure that the exterior of the home is as inviting as possible.

2. Assuming since you can’t smell it, buyers won’t either

We’ve all walked into a home and been blasted by stinky, stale odors. Whether they come from pets, kids, cooking or cigarettes, these odors can have potential buyers running for the door.

Fabrics hold odors so consider having upholstered furniture professionally cleaned. Change the HVAC filters for they, too, tend to hold odors. Dry-clean or launder drapes, curtains and throw rugs.

If the odor is cigarette smoke, you may need to paint. Wash the ceilings and walls first with ammonia and water. Then, use a shellac-based primer, such as Zinsser B-I-N, before applying the paint.

3. Your bathroom seen better days

Yes, we understand how difficult it is to keep the hardest-working room in the home tidy. But bathrooms are important to buyers, so yours should be spotless and completely depersonalized.

After cleaning and painting (if necessary), remove personal items, such as toothbrushes, mouthwash, toothpaste, shampoo, etc. from the countertop and the /tub shower’s interior. Ensure that the shower curtain and the toilet lid are closed.

A good rule of thumb for the bathroom is that if something is not decorative, remove it from view.

4. Your home’s interior gives off a“cave” vibe

For as long as we can remember, homebuyers value a light and bright atmosphere over all else. Most of the time they don’t know why a dark home feels uncomfortable; it’s more of a perception.

It’s imperative to remedy a lack of natural light in the home. You can do this with additional lighting and by opening all window coverings.

Dark and gloomy doesn’t sell homes. Light and bright does. Light up every dark space in the home.

5. Assume buyers won’t look at your garage.

You won’t like this one.

Clean the garage.

In their efforts to de-clutter their homes for sale, we see many clients shove all the excess into the garage. Bad move, especially in light of the fact that 86 percent of homebuyers want garage storage space.

Show them how roomy yours is by removing oversized items (take them to storage) and cleaning the garage with the same zeal you did when cleaning the home. Organize what’s left so that the room screams “Look at all this storage space!”

Ensure that while it’s on the market, your home is the belle of the neighborhood. Correcting these five deal breakers is inexpensive and easy but play a big role in your home’s presentation.

10 must-read tips to get your home ready for the inspection

You have only one chance to impress the home inspector. Of course, you can’t possibly know everything that might show up on the inspection report, but you can make your home appear well-maintained and take care of some common problems before the inspector knocks on the door.

  1. Clear all access points that the inspector will use. These include the attic, water heater and electrical panel.
  2. Change the HVAC filters and clean the fuzz off the vent covers.
  3. Ensure that all light switches work and replace burned-out bulbs.
  4. Clean out the fireplace. Check the damper to ensure that it is operating properly. Cracks in the brick? Seal them with a high-temp silicone sealant.
  5. How are those windows? Replace cracked glass and torn screens. Then, open every window in the home to make sure they slide smoothly (both upon opening and closing). While they’re open, take a rag and some cleaning solution to the tracks. Finally, clean both inside and outside glass.
  6. Another common problem that makes its way onto too many inspection reports is water-damaged wood, especially the soffits, fascia, window sills (and here you thought you were finished with those windows!) and door trim.
  7. Cracks and holes in stucco should be sealed. We found a YouTube video (“How to Repair Cracks and Holes in Stucco”) that will walk you through the process.
  8. The pros at TheBuildingInspector.net suggest that owners of wood-framed homes should ensure that mulch isn’t piled up the foundation. “You should be able to see 4 inches of exposed foundation,” they suggest.
  9. Those same pros urge you to ensure that your kitchen appliances are clean and that they work properly. (Ice maker as well).
  10. Fix any leaks in the ceiling. Then, seal the stain and paint.

Remember, the home inspector will perform a visual inspection of the home and its components. This includes the HVAC system, plumbing, heating, gas lines and electrical panel.

The inspection will take between two and three hours and, as tempting as it may be to be present, the buyer (who hired the inspector) will often tag along, with his or her real estate agent, naturally.

If you have any questions about the home inspection process, please feel free to ask. We’re happy to provide all the information you need.

 

Selling your home? Get ready for the legal paperwork

The home selling process is unlike any other. Sell a car and pretty much all you do is hand over the keys and the pink slip.

Selling a home requires mountains of legal paperwork, however. From listing to closing, get ready to sign a lot of papers.

Sadly, it can become so burdensome that many home sellers (and buyers too), become overwhelmed and stop reading what they’re signing. Big mistake.

If you can’t stomach reading another document, run them by your attorney. This is important stuff and you need to understand what your signing.

Today we introduce you to two forms that you’ll receive and help you understand their importance.

Listing Agreement or Contract

When you choose a real estate agent to represent you in the sale of your home you are actually hiring his or her broker. Only the broker is legally able to enter into a contract with home sellers and buyers.

Real estate agents (unless he or she is also the broker) act as the broker’s representative (which is why they are called “agents”).

This is important information that most real estate consumers don’t understand. The listing agreement is a contract between you and the real estate broker who is being represented by a real estate agent.

There are certain items that must be included in this contract according to federal and state law and the National Association of REALTORS® (if the broker is a member).

The basics include:

  • The offering price
  • The date the contract begins and ends
  • The amount of the broker’s fee (the commission you’ll be expected to pay at closing)
  • Your agreement for your agent’s broker to cooperate with other brokers and how that other broker (the one who brings the buyer) will be compensated.
  • Whether or not your broker can reveal previous offers.

Other items you may see include:

  • Your permission to allow the broker to put up a sign in the yard and a lockbox on the door.
  • Your permission to allow the broker to list the home in the Multiple Listing Service and online.
  • A list of items that are not included in the home sale (such as appliances).
  • Your promise that you own the home and there is no pending notice of default on the property. 

Seller’s Disclosure

Real estate brokers have legal and ethical duties to both parties in the transaction – duties that their agents must carry out.

Sellers, too, have duties and one of them is a legal duty: disclosure.

Failure to disclose aspects of the home that may impact the buyer’s safety and comfort or the home’s value can land a home seller in court, facing huge fines.

A home defect discovered after the sale is the primary court dispute in the real estate industry.

Take your time when filling out this form. If you don’t understand anything, ask. Although we aren’t licensed to practice law, we’re happy to help in any way we can.

Answer the questions honestly. If you truly don’t know if a certain defect exists, say so. If you do know, however, you have a legal duty to disclose your knowledge.

Tasks most homeowners neglect when getting the house ready to sell

Preparing a home for the market is a lot like trying to get a sip of water from an open fire hydrant. Depending on how well you maintained the home, it can be overwhelming.

In the frenzy to get the big things done, some of the small, but critical tasks remain unattended to.

We see it often. An otherwise well-prepared home with just a few small items that need attending to.

Since bathrooms and kitchens are the rooms most important to most homebuyers, we’ll concentrate on them.

If you’re getting your home ready for the market, put these on your to-do list.

Get the bathroom ready for homebuyers

  1. Ring around the toilet bowl? Get rid of it. Even though we always suggest to our sellers that they leave the toilet lid closed, we often find it open.

A ring at the water line or any other part of the bowl that’s visible will be noticed by those viewing your home.

We spoke with a team of professional cleaners who offered up a few tips:

Start with bleach. Pour about 1 cup of bleach into the bowl and walk away. If the stain hasn’t calcified, it should be gone in about 30 minutes to one hour.

If it remains, grab a pumice stone. Let the water drain from the toilet as it’s flushing and use the water turn-off valve (usually behind the toilet) to turn of the water before it starts refilling.

Lightly scrub the stain with the pumice stone.

If all else fails, consider buying a product specific to removing calcium and lime, such as CLR. You can pick it up at Walmart, Home Depot and online at Amazon.com.

Follow the instructions carefully and that ring should be a thing of the past.

  1. Nasty grout

The internet is full of helpful and not-so helpful cleaning advice. One of the most common chores we’ve seen is cleaning bathroom grout. The suggestions for the job include everything from toothpaste to the ubiquitous baking-soda-and-water to vinegar.

It turns out that bleach is the best grout cleaner. Use it right out of the bottle and let it sit before scrubbing away the grime. Do wear gloves and a face mask for this job.

Too toxic for you? Try using oxygen bleach powder (sodium percarbonate). A well-known brand is OxiClean but there are others as well. Check out this list at Amazon.com.

Mix the powder with enough water to make a paste and smear it over the grout lines. Leave it there for 15 minutes.

Add more to the areas where the solution has soaked in, ensuring that the grout is always flooded with the paste.

Finally, use a toothbrush or other small scrubbing implement to scrub the grout, adding more if needed to remove the stains.

Get busy in the kitchen

  1. Look at listings of homes for sale and you’ll no doubt come across one of our pet peeves: photos, school work, etc. stuck to the front of the refrigerator. Remove them, please.
  1. Clean the glass on the oven door. Yup, it sounds like a huge headache of a job, but we promise, it’s not.

Before starting, lay an old rug or towel on the floor in front of the oven to catch any paste or other substances that may fall to the floor.

Wipe the glass surfaces down and then spread a baking soda-water paste over the glass window portion. Lay it on as thick as possible, swirling as you spread it.

Allow the paste to remain for 30 minutes then use a clean, wet rag to remove it. You may need to wring out the rag and wipe several times to remove it.

If any stubborn stains remain, use a sharp razor blade to gently scrape them away.

Repeat the procedure on the front of the glass window in the oven.

Finally, use your favorite window cleaner to shine up the glass.

3. Organize the contents of kitchen cupboards. Yes, potential buyers will open the cupboards and the pantry door.

While it may seem nosy, they’re looking to see how roomy they are and whether they will contain all of their kitchen “stuff.”

If you haven’t yet removed items you rarely use (especially larger items, such as that ice-cream maker or waffle iron), remove them now.

Then, organize what’s left so that when potential buyers peer in they see lots and lots of space.

  1. Clean the inside of the dishwasher

Remove and clean the filter. You’ll find it beneath the spray arm on the bottom of the dishwasher’s interior.

Get the water from the faucet as hot as you can tolerate and rinse the filter, using an old toothbrush to scrape away food particles stuck to it. Once it’s clean, replace it in its spot inside the dishwasher.

Use a dishwasher cleaning product to finish the job. Cascade manufactures one but there are others you can find at the supermarket, Walmart or purchase online at Amazon.com. Follow the instructions carefully.

  1. Shine up stainless-steel appliances

Buyers are in a long-time love affair with stainless steel appliances.

Yet, if you’ve look at listings of homes for sale recently, you’ll notice that many homeowners neglect to clean off the handprints and spilled food and drink.

The best way to clean these appliance fronts is with WD-40 (available at auto parts stores, big-box home improvement stores and many supermarkets).

Spray the product on a rag and wipe down the appliance. With a clean rag, wipe the surface again. Finally, use a microfiber cloth to buff the finish.

Don’t forget to replace dead lightbulbs, clean their fixtures and wash the windows in both rooms.

Now, you’re one step ahead of the competition.

Happy selling!

Protect your belongings while your home is on the market

Let’s get this out of the way upfront: Not everyone that shows up at an open house or requests a viewing of your home is honest.

Sure, most folks are, but some may be tempted to steal anything that catches their eye. And some of them may just act on the urge.

One of the most important steps in readying your home for the market is to protect your valuables and your information from the strangers that will be passing through.

Here’s a checklist of the most commonly “lifted” items.

Artwork

While valuable artwork isn’t exactly easy to pocket, thieves have been known to look at MLS listing pictures of luxury homes online. They aren’t in the market for a luxury home, but they do want to see what’s inside.

Before the photographer comes to the home to snap the pictures, take down anything that may catch the eye of a bad guy.

Prescription drugs

It’s not difficult to slip a bottle of pills into a pocket or purse. Plus, since most people keep their prescriptions in the bathroom, the perp has all the privacy he or she needs to rifle through the medicine cabinet.

Remove all prescription medications from the home. Keep them in your car, lock them in a safe or ask a friend to hold on to them for you.

Weapons

Most gun owners are responsible and keep their firearms under lock and key. If you don’t have a gun safe, take the weapon out of the home. The same holds true for other weapons

Technology

Laptops, iPads, smart phones, smart speakers, smart watches and earbuds are quite popular with thieves. Again, take them out of the home or lock them up.

Any tech items that are too large to remove from the home, such as a desktop computer, should be password protected and turned off.

Cash and Jewelry

Every thief’s favorite find is jewelry. In fact, the experts at The AA Home Insurance claim that jewelry is the most commonly stolen item from homes.

They are especially fond of diamonds, pearls and gold but will take anything they can pawn. Almost $1.4 billion worth of jewelry and precious metals was stolen in 2016,” according to Cannon Safe Company’s Angela Avila-McDonald, quoting FBI statistics.

Keeping cash and jewelry in a secure safe is the ideal way to foil a thief while your home is on the market.

Sensitive documents

Lock up bills, letters and anything else that may have identity information, such as social security numbers, driver’s license numbers, bank account numbers, dates of birth, Wi-Fi or computer passwords.

The following documents should be locked away or removed from the home:

  • Bank statements
  • Blank or cancelled checks
  • Mortgage statements
  • Passports
  • Social Security cards and records
  • Credit card information

Anything that can help someone steal your identity should be considered sensitive.

Car keys, house keys and garage door openers

Easy to pocket, keys and remotes allow the perp to come back at another time and gain access to your home and/or car. Don’t leave spare keys, etc. sitting in a drawer.

Pets

If your pets will remain in the home, keep them kenneled. Consider investing in a lock for the kennel, especially if you have a dog breed that is popular, rare or expensive.

Thankfully, most open houses and showings go off without a hitch. In fact, thefts are rare. But it’s always better to be proactive, especially with strangers coming into your home.

3 Important questions every homebuyer should ask, but few do

In that moment when you fall in love with a home, it’s almost impossible to let logic rule. Emotions run rampant, resulting in cosmetic aspects winning over financial aspects. We see it all the time in our real estate practice.

And, we sympathize. Especially when you’re tiring of looking at home after home; when you finally find “the one,” it’s hard not to get excited. But, it’s dangerous.

Far too often we see buyers neglect getting the valuable answers to questions that may seem routine but aren’t.

How old is the . . .?

If in doubt about the age of any of the home’s components and the home inspector isn’t able to help you figure it out, let me know; I’m happy to ask the homeowner for you.

This is especially important for appliances, such as the water heater (which has a life expectancy of 8 to 20 years, according to Lowe’s), the roof (the average life span of a roof from 20 to 50 years, depending on material) and the gas furnace, which gives up the ghost after about within 15 to 20 years.

It’s important to know how much life is left in the home’s components so you aren’t face with a large financial outlay when you least expect it.

What are the average monthly utility bills?

Americans pay, on average, $117.65 a month for electricity. Naturally, this varies depending on geography and other factors.

As a buyer, you may get a range of monthly prices from different sellers. This is because there are ways of mitigating high utility bills. Some homes are constructed more efficiently, others have lowers bills because the homeowners made upgrades and then there are those that seem to bleed electricity because of cheap construction techniques.

Water, electricity, gas, sewage, garbage and electric bills can take a major bite out of your housing budget each month, so get the answers to this important question before you agree to purchase the home.

Buying a condo?

If it’s a condo that’s snagged your heart, there are a number of very important questions to ask. Chief among them is ascertaining the amount of condo maintenance fees you’ll be responsible for each month.

But, that’s just the beginning. How healthy is the community’s reserve fund? What percentage of the units are tenant occupied?

Reading the rules and regulations will answer many other miscellaneous questions, such as whether or not pets, and how many, are allowed in the community, whether you will be allowed to run your business out of your home, noise rules and more.

The HOA meeting minutes are full of useful information as well. One of the first things to look for are complaints from homeowners – look even more carefully to see if these complaints are voiced repeatedly, over the course of several meetings. If so, it may be an indication of an unresponsive board of directors.

Feel free to ask all the real estate-related questions you have – we’re happy to answer them all.

Confused about your home’s value?

Your neighbor Joe just listed his home at $435,000. It’s quite similar to yours so, naturally, you assume your home is worth the same amount.

Do you know what the list price of a home is known as in the real estate world?

“Fantasyland”

Even though his real estate agent most likely provided him with her most educated guess, based on research (remember, we’re assuming here), the seller has the final word on how much to list the home for. Therefore, the list price of any home represents what the seller is hoping to get for the home.

Whatever amount Joe decides to take for the home, it becomes a comparable that will be used in determining your home’s market value.

Confused?

Just remember that a home’s value is based on what a willing buyer will pay for it and a lender will lend on. And, we only have that information when the home sells.

No two homes are identical

Let’s imagine that Joe’s home sold for the full list price of $435,000, which isn’t at all far-fetched in the current real estate market.

Both yours and Joe’s house were built by the same builder and you both chose the same model. Therefore, your home is worth the same amount that Joe’s is, right?

Nope. You have faithfully maintained your home throughout the years you’ve lived in it.

Joe? Not so much.

Your neighbor did, however, add some improvements to his home, such as the addition of another bathroom. He also chose his lot strategically, for the value it would add to the home.

Then, there’s your home’s amazing landscaping, which Joe’s house is sorely lacking.

Your home may be worth that $435,000 that Joe got for his home. Then again, it may not. With the addition of the bathroom to Joe’s place came more square footage—a value adding feature, according to appraisers.

What else adds value to a home in the eyes of appraisers?

The general condition of the home. Since you’ve maintained your home better than Joe has, it’s a plus $ to the appraiser.

  • Amenities, upgrades, additions and other home improvements.
  • Location of the home.
  • Age of the home.
  • Square footage
  • Floor plan
  • Current market conditions and trends
  • Neighborhood characteristics (according to fanniemae.com).

An appraiser for a lender considering a loan for an FHA borrower has a number of other items on her checklist, such as those on this list at sacramentoappraisalblog.com.

If your buyer is obtaining a loan backed by the U.S. Department of Veterans Affairs (V.A.), the appraiser must not only determine reasonable market value, but also ensure that the home meets V.A. Minimum Property Requirements (MPRs).

These requirements include ensuring that the home is:

  • Sanitary
  • Safe
  • Structurally sound

In the end

Regardless of how much you think your home is worth and how much the buyer is willing to pay, it is the appraiser who has the last word.

This doesn’t mean you are powerless, however. You have the right to point out improvements or anything else that you and your agent think might raise the home’s value over that of your neighbors.

The buyer has a right to challenge a low appraisal.

“There is nothing sacred about appraisals,” according to the late Robert Bruss, real estate attorney and syndicated columnist.

“They often are wrong, especially if the appraiser is not very experienced or familiar with the neighborhood.”