Is there ever a question you CAN’T ask a Realtor? Never. When it’s your future and your money at stake, you owe it to yourself to pose any questions that eat at your gut, so ask away. With the help of ImagineYourHouse.com’s Lynna Pineda, we’ll answer a few common ones for you, but we think you’ll get the idea.

 

Do I really need to replace my carpeting before the first open house?

 

If it’s worn, smelly, discolored or worn out and YOU were a potential buyer walking through your house for the first time, how would you react? Buyers think about two things when they tour a property that has not been updated or repaired: time and money.

 

We are smokers. Do we really have to worry about what our home smells like?

 

Looking at online photos of your home show one thing. Walking through the front door and smelling the smoke that has permeated your flooring, drapery, cabinets and even furniture are an entirely different experience. Many a buyer will turn on their heels right there in your entryway and head for the next listing. So yes. Be concerned. Be very concerned.

 

Is it okay to decorate my home for the holidays while it’s on the market?

 

Absolutely. ’Tis the season. But if you are prone to filling every nook and cranny with happy Santas, hanging stars and extra Christmas trees, this is the time to scale back. You’ll obscure spaces that might otherwise be considered spacious.

 

Does having a dog make my house harder to sell?

 

Not if you’ve already dealt with and remediated (1) doggie odors (2) doggie damage and (3) your furry friend’s tendency to bark or scare homebuyers.

 

Can I keep my displays of vintage guns, religious paintings, and my grandmother’s doll collection while my house is on the market?

 

If you hope to get the highest prices and sell your home in the shortest length of time, remove as many of these things as possible so the widest range of buyers walking through there will not be distracted. It’s a great idea to pack them up early and have them waiting to grace the interior of your next home.

 

 

Source: Imagineyourhouse.com, , TBWS

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So you’ve found the house of your dreams, made an offer, and finally, both you and the seller have agreed on a price. This is when your agent has you sign the sales contract, and you pop the bubbly, right? Perhaps you shouldn’t pop that cork so fast. You may have more negotiating to do.

 

Unless you are buying a new construction home where most buyers opt out of doing an inspection, you are only at the beginning of the negotiating process, because negotiations still occur during the escrow period — mostly notably over what is revealed during a home inspection. Zillow’s Brendon DeSimone offers these tips for this step along your home purchase journey:

 

Don’t expect the seller to get the work done for you, even if they agree to pay for it. Instead, ask for a credit for the work to be done. Why? Because the seller’s focus is on moving out. “If the property is moving toward closing, they’re likely packing and dreaming of their life post-sale. The last thing they want to do is repair work on their old home. They may not approach the work with the same conscientiousness that you, as the new owner, would. They may not even treat the work as a high priority,” says DeSimone.

 

Even if you got a quote from a contractor or tow for the repairs, taking a cash-back credit at close of escrow means you can even use the money to complete the project yourself (if it’s simple enough) and pocket the difference.

 

If you got inspired watching a slew of HGTV shows and are already planning to remodel a bathroom the minute escrow closes, then it’s unlikely that you would care about a bit of floor damage, a leaky faucet, or that the tiles need caulking because they’ll get taken care of during your renovation. But the repairs are still up for negotiation and asking the seller for a credit to fix these issues will help offset some of your closing costs.

 

Don’t share your plans with the seller or the seller’s agent. “Revealing your comfort level with the home or your intentions, in the presence of the listing agent, could come back to haunt you in further discussions or negotiations,” says DeSmone. “If they sense you are uneasy with the inspection, they’ll be more willing to relay that to the seller. Conversely, if you spend two hours measuring the spaces and picking paint colors, you lose negotiation power.”

 

This is especially important if you mention gutting the kitchen, according to DeSimone. “If you mention you’re planning a gut renovation of the kitchen, the sellers will certainly hear about it. And they’re going to be less likely to offer you a credit back to repair some of the kitchen cabinets.” It’s wise to resist the urge to share your giddiness regarding plans for the house.

 

He warns buyers about completing the original contract assuming with the expectation that they can and will negotiate the price down more after the inspection, as it may backfire on you — particularly in a competitive seller’s market where sellers tend to call all the shots.

 

DeSimone ends his cautionary advice with, “A real estate transaction is never a done deal until the money changes hands and the deed is transferred. Stay on your toes. Otherwise, you may risk losing out on further viable negotiation opportunities, which could lead to buyer’s remorse.”

 

 

Source: TBWS

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Home buyers today are faced with a fundamental choice: should they buy a home in an established neighborhood? Or is it better to go for a never-lived-in home in a new development? Each has its advantages and drawbacks. Here are some of the top decision points.

An “older” home—a better term would be “resale home”—will typically be in a neighborhood that is well-established. Many of the neighbors may’ve lived there for decades. The character of the neighborhood may be evident: for example, do most of the other homeowners have teenagers, or small children, or are many nearing retirement age?

Older homes were built when land was less expensive, so they tend to have larger lots than today’s newer developments, which places larger homes on small lots, with very little space between buildings.

Trees, lawns and other vegetation will be mature compared to new developments, which can seem comparatively sparse and open.

On the other hand, older homes may have some functionally obsolete features, such as older kitchens and baths, and floor and window coverings that need updating. There are some aspects of older homes that do not lend themselves well to modernization, such as floor plans, smaller rooms, and closets.

Older homes may also be located closer to the center of town—and that convenient location may mean commanding a higher price per square foot than a newer development located miles from the center of the town or city.

On the other hand, buyers may find brand-new appliances, roofs and other amenities with builder warranties to be attractive features. Newer homes may be equipped with high-tech upgrades (built-in wi-fi and Bluetooth, anyone?) that may be impractical to install in an older home. Also, as building codes have evolved over the years, new homes typically are more energy-efficient, so they may be less expensive to heat and cool.

Because cities and towns tend to expand outward, living in a new development may involve more driving to work, shopping and entertainment. For many buyers, this has been an acceptable trade-off.

Buyers have been increasingly opting for new homes; sales in that portion of the market spiked 17% from 2016, even though there are 9% fewer homes on the market from last year. Nationally, the median price of a new home reached $319,700 for new homes, compared to $245,100 for existing properties. Only 13% of the new homes sold in 2016 were under $200,000. Most were priced between $200,000 and $400,000. 19% were $500,000 and above.

Although the inventory of new and resale homes is still tighter than it has been in the past, buyers can still enjoy historically low-interest rates and a wide variety of financing choices, regardless of their choice of new or “old” home.

 

Source: TBWS

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The financial crisis that started in 2008 caused many homeowners to lose their properties to foreclosure, deed-in-lieu or short sale. This is referred to in the mortgage industry as an “adverse event,” and will affect one’s ability to get a mortgage after the crisis has passed.

 

Many people feel that the stigma of foreclosure will haunt them for the rest of their lives, forever keeping them from becoming homeowners again. While an adverse event presents some challenges to someone coming back to the market—hence the term, “boomerang”—it is by no means a permanent barrier.

 

First, let’s clarify what these events are, and explain how to recover from them. Be aware there are different guidelines for conventional, FHA and VA loans.

 

Conventional loans

 

When a lender makes a loan to buy or refinance real estate, the property is its security for that loan. If the homeowner does not make the payments as agreed, the lender can force the sale of the property to get its money. This is called foreclosure.

 

Homeowners may choose to avoid the ordeal of foreclosure by simply deeding the property back to the lender. This is called “deed-in-lieu of foreclosure,” or simply, “deed-in-lieu.”

 

Many homeowners, knowing that they owed more on their homes than they were worth, sold their homes as “short sales.” This meant that the lender agreed to accept less than the outstanding balance when the property was sold. Lenders refer to this as a “pre-foreclosure sale.”

 

A buyer will have to wait seven years from a foreclosure to qualify for a new conventional mortgage. If they did a short sale or deed-in-lieu, that time drops to four years.

 

A possible loophole

 

A borrower may be able to claim that “extenuating circumstances” were responsible for their financial woes. These are specifically defined as, “non-recurring events that are beyond the borrower’s control that results in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.” They must document these events thoroughly; a simple letter of explanation won’t be sufficient. The lender requires divorce decrees, medical reports or job severance notices to confirm acceptable extenuating circumstances.

 

FHA and VA loans

 

These guidelines are more forgiving. FHA loans require three years from a foreclosure or deed-in-lieu or just two years after a short sale. VA allows just two years to have passed.

 

Extenuating circumstances can shorten these time frames as they do for conventional loans. For FHA loans, the criteria are a bit more exacting; a homeowner who received a job transfer and couldn’t sell his property would not be able to claim extenuating circumstances, for example. A decrease in income is not by itself an extenuating circumstance for an FHA loan, but it may be acceptable if there is other supporting documentation.

 

VA loans are more lenient. They require just two years from a foreclosure, deed-in-lieu or short sale. A buyer may be able to claim extenuating circumstances, but they are largely up to the underwriter’s discretion.

 

What to make of this

 

The events following the 2008 crisis and the ensuing recession were traumatic for many. Job losses or changes, transfers, and plummeting real estate values all caused people to lose hope of ever getting the life they hoped to have. But there is always hope. No one should assume they are forever locked out of the housing market because of earlier financial tribulations. They should look at their situation with fresh eyes, with some knowledge, and the realization that the dream of homeownership is still attainable.

 

Source: TBWS

 

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increadingratesMortgage rates are continuing to rise as investors’ appetite for mortgaged backed bonds is decreasing. We have seen a rapid rise in mortgage interest rates over the last 2 weeks. 30 year fixed rates under 4% may be a thing of the past. The payment on a typical $200,000 30 Year fixed rate mortgage today has increased about $72 per month compared to a mortgage closed earlier this spring..

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The increase in rate means some home buyer will only qualify for a less expensive home than they would have been able to purchase in May. The increase in rates has not yet put a damper on the hot housing market, homes priced under $350,000 in the Richmond Metro Market.

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closedfamilyHUD Reduces the Cost of FHA Loans.

 

Like the cost of oil the cost of FHA loans is falling. In its first mortgagee letter of 2015, HUD announced that the monthly premium on 30 year fixed rate loans will go down by ½ of a percent (50 bps), starting n loans with FHA case numbers issued after January 26, 2015.

 

 

New monthly MIP premiums:

 

Term > 15 Years
Base Loan Amt. LTV Previous MIP New MIP
≤ $625,500 ≤ 95.00% 130 bps 80 bps
≤ $625,500 > 95.00% 135 bps 85 bps
> $625,500 ≤ 95.00% 150 bps 100 bps
> $625,500 > 95.00% 155 bps 105 bps
Term ≤ 15 Years
≤ $625,500 ≤ 90.00% 45 bps 45 bps
≤ $625,500 > 90.00% 70 bps 70 bps
> $625,500 ≤ 90.00% 70 bps 70 bps
> $625,500 > 90.00% 95 bps 95 bps

 
The reduction in premium translates to a monthly payment reduction of over $83 per month on a $200,000 loan. Home buyers can qualify to purchase larger homes.

 

Combine the MIP reduction with the recent interest rate drop, many folks will save thousands by refinancing, especially those with 30 year FHA loans closed after the spring of 2009. (click here to request information for an FHA Streamline Refinance).

 

www.PaulCantor.info

 

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Home Prices Increase at Fastest Annual Pace Since May 2006- Case Shiller

2013_2D00_04_2D00_30-case-1

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soldsignPending Home Sales Soar Despite Rough Winter

Rough winter weather across much of the nation at the start of this year apparently did not keep home buyers away. Contracts to buy existing homes in January rose to the highest reading since April 2010.  Read Article.

 

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newhomecosts

FHA loans are going to be more expensive.  Starting in April a lot of first time home buyers will be hit with changes to FHA loans that will cost tens of thousands of dollars.  A recent HUD Motgagee letter (2013-04) outlines changes to both an increase in monthly payments amount and the elimination of the ability to cancel monthly mortgage insurance premium (MIP) payments.  The results translate into over $20,000 of additional payment amounts over the course of one $300,000 FHA loan or over $10,000 over the life of a $150,000 FHA loan.

Tables of the FHA MIP changes:

 Effective for case numbers assigned on or after April 1, 2013. MIPchart2012a

 Effective annual MIP rates for loans  or after June 3, 2013

MIPchart2012b

 

Sometime in the near future HUD is also expected to increase the required minimum investment to 5% from 5.5% on some larger FHA loans and cap debt to income ratios to 43%.

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According o Reuters now is the time to buy:  Term Life Insurance, TVs, Apps, Used Cars and Real Estate.  Prices are set to rise and money is cheap:

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