The Value of Home Maintenance

By: John Riha

Published: March 9, 2010

Regular home maintenance is key to preserving the value of your house and property.

“It’s the little things that tend to trip up people,” says Frank Lesh, former president of the American Society of Home Inspectors and owner of Home Sweet Home Inspection Co. in Chicago. “Some cracked caulk around the windows, or maybe a furnace filter that hasn’t been changed in awhile. It may not seem like much, but behind that caulk, water could get into your sheathing, causing mold and rot. Before you know it, you’re looking at a $5,000 repair that could have been prevented by a $4 tube of caulk and a half hour of your time.”

Maintenance affects property value

Outright damage to your house is just one of the consequences of neglected maintenance. Without regular upkeep, overall property values are affected.
“If a house is in worn condition and shows a lack of preventative maintenance, the property could easily lose 10% of its appraised value,” says Mack Strickland, a professional appraiser and real estate agent in Chester, Va. “That could translate into a $15,000 or $20,000 adjustment.”
In addition, a house with chipped, fading paint, sagging gutters, and worn carpeting faces an uphill battle when it comes time to sell. Not only is it at a disadvantage in comparison with other similar homes that might be for sale in the neighborhood, but a shaggy appearance is bound to turn off prospective buyers and depress the selling price.
“It’s simple marketing principles,” says Strickland. “First impressions mean a lot to price support.”

Prolonging economic age

To a professional appraiser, diligent maintenance doesn’t translate into higher property valuations the way that improvements, upgrades, and appreciation all increase a home’s worth. But good maintenance does affect an appraiser’s estimate of a property’s economic age—the number of years that a house is expected to survive.
Economic age is a key factor in helping appraisers determine depreciation—the rate at which a house is losing value. A well-maintained house with a long, healthy economic age depreciates at a much slower rate than a poorly maintained house, helping to preserve value.

Estimating the value of maintenance

Although professional appraisers don’t assign a positive value to home maintenance, there are indications that maintenance is not just about preventing little problems from becoming larger. A study by researchers at the University of Connecticut and Syracuse University suggests that maintenance actually increases the value of a house by about 1% each year, meaning that getting off the couch and heading outside with a caulking gun is more than simply a chore—it actually makes money.
“It’s like going to the gym,” says Dr. John P. Harding, Professor of Finance & Real Estate at UConn’s School of Business and an author of the study. “You have to put in the effort to see the results. In that respect, people and houses are somewhat similar—the older (they are), the more work is needed.”
Harding notes that the 1% gain in valuation usually is offset by the ongoing cost of maintenance. “Simply put,” he says, “maintenance costs money, so it’s probably best to say that the net effect of regular maintenance is to slow the rate of depreciation.”

How much does maintenance cost?

How much money is required for annual maintenance varies. Some years, routine tasks, such as cleaning gutters and changing furnace filters, are all that’s needed, and your total expenditures may be a few hundred dollars. Other years may include major replacements, such as a new roof, at a cost of $10,000 or more.
Over time, annual maintenance costs average more than $3,300, according to data from the U.S. Census. Various lending institutions, such as Directors Credit Union and LendingTree.com, agree, placing maintenance costs at 1% to 3% of initial house price. That means owners of a $200,000 house should plan to budget $2,000 to $6,000 per year for ongoing upkeep and replacements.

Proactive maintenance strategies

Knowing these average costs can help homeowners be prepared, says Melanie McLane, a professional appraiser and real estate agent in Williamsport, Pa. “It’s called reserve for replacements,” says McLane. “Commercial real estate investors use it to make sure they have enough cash on hand for replacing systems and materials.”
McLane suggests a similar strategy for homeowners, setting aside a cash reserve that’s used strictly for home repair and maintenance. That way, routine upkeep is a snap and any significant replacements won’t blindside the family budget. McLane’s other strategies include:
Play offense, not defense. Proactive maintenance is key to preventing small problems from becoming big issues. Take the initiative with regular inspections. Create and faithfully follow a maintenance schedule. If you’re unsure of what needs to be done, a $200 to $300 visit from a professional inspector can be invaluable in pointing out quick fixes and potential problems.
Plan a room-per-year redo. “Pick a different room every year and go through it, fixing and improving as you go,” says McLane. “That helps keep maintenance fun and interesting.”
Keep track. “Having a notebook of all your maintenance and upgrades, along with receipts, is a powerful tool when it comes to sell your home,” advises McLane. “It gets rid of any doubts for the buyer, and it says you are a meticulous, caring homeowner.” A maintenance record also proves repairs and replacements for systems, such as wiring and plumbing, which might not be readily apparent.

New Program to Help Home Owners Has Great Benefits, But Tough Rules

By: Dona DeZube

Published: June 21, 2011

If you’re having trouble making your mortgage payment, there are a billion reasons to check out the latest federal government mortgage assistance program. The U.S. Department of Housing and Urban Development’s Emergency Homeowners Loan Program, now running in 27 states and Puerto Rico, will dole out $1 billion in interest-free loans to about 30,000 home owners who are unemployed, under-employed, or suffering financially due to a medical crisis.

If you’re having trouble making your mortgage payment, there are a billion reasons to check out the latest federal government mortgage assistance program. The U.S. Department of Housing and Urban Development’s Emergency Homeowners Loan Program, now running in 27 states and Puerto Rico, will dole out $1 billion in interest-free loans to about 30,000 home owners who are unemployed, under-employed, or suffering financially due to a medical crisis.
It’s a federal program, so of course there’s paperwork. And you only have until July 22 to get it filled out and over to one of the counseling agencies helping to run the program. Call 855-346-3345 for information about participating agencies in your area.
You’ll know by Oct. 1 if you’ve been approved for EHLP because the money has to be obligated before the federal government’s fiscal year ends on Sept. 30th.
The toughest thing about the program may be the eligibility rules. If you want to be approved for EHLP, you can’t:

• Have federal tax liens

• Have past-due student loans (deferments and forbearance are OK)

• Have more than one 60-day late mortgage payment in the past two years

• Be in bankruptcy

• Have family income of more than $75,000 or 120% of the area median income

Then there are things you must have to get into EHLP:

• Be a minimum of three months late on your mortgage payment.

• Income that’s at least 15% less than what you were earning in 2009.

• The ability to make your full mortgage payment again in two years, because you’re likely to be working or have another source of income again by then.

That last requirement will be hard for HUD to prove; it’ll likely be up to an underwriter to decide who qualifies.
But if you can meet those requirements (as well as a bunch more that the credit counselors running the program will tell you about), EHLP is a sweet deal.
You have to agree to pay 31% of your family’s monthly income toward the mortgage payment (minimum payment is $150). The federal government loans you the money to pay the rest of your mortgage payment.
You can keep getting that subsidy for two years, or until you’ve borrowed $50,000.
The best part is that if you make your mortgage payments on time, the government forgives 20% of the EHLP loan every year. So in five years, your loan is completely forgiven.
If you think there’s even the slightest possibility you’d qualify for the program, you should go for it. You’ve got nothing to lose and a lot of mortgage payment help to gain.

Three energy saving home improvements that pay off

Rule of thumb: Try to surpass the 2.3% yearly average with energy saving home improvements that decrease your energy consumption by 5% or more but have a modest initial investment. Remember, to ask whether your utility or state government offers rebates or tax credits for these improvements.
1. Seal and insulate ductwork that passes through unheated spaces—the attic, a crawl space, a garage. This one improvement can enhance the efficiency of your heating and cooling system by 20%—a 5% reduction in your monthly bill. If you employ an HVAC pro to perform this job, you'll spend a few hundred dollars for labor and materials.
2. Purchase a programmable thermostat. For merely $25 to $250, you can save, on average, around 8% on energy bills simply by programming it properly.
3. Increase attic insulation and seal air leaks. This is one of the best energy-saving improvements out there. Just by insulating and sealing your home can reduce your energy bills by 10%. Improving your attic insulation to the R-value recommended for your region costs anywhere from $.25 to $1 per square foot, including materials and labor; it's less if you do it yourself.
But you won't get the maximum savings if you don't seal air leaks, so plan this as a combo job. Caulking and weather-stripping usually costs from $50 to $350, depending on the size of your house.

How Do Interest Rates Affect Buying Power?

In today’s volatile real estate market, I am often asked by buyers: “Should I wait until the market ‘bottoms out’ before I purchase, or should I act now?” The best answer is…”That depends.” It depends on what you want to accomplish. Are you simply wanting to get the “cheapest price” on a house or are you more concerned about what your housing costs will be over the long term? As you know, there is a huge difference between “price” and “costs.”

First of all, it is impossible to actually “time” the market to the point of buying a home at the absolute “bottom” of the market. In the meantime, while you wait to “buy at the bottom,” what happens if interest rates go up? (and they will!) Let’s assume you want to purchase a median priced home at $250,000. If interest rates go up by just 1/4 of one percent (.25%), you will need to earn an additional three percent (3%) in income to qualify for the same $250,000 house. If you don’t expect your income to go up by 3%, then you must purchase a home priced 3% less. What’s worse, for every .25% increase in interest, it ends up costing you an additional $9,518 in interest payments over the course of the loan. Now, if rates go up by one full percentage point (1%), that would cost you $38,072 in additional interest over the life of the loan. What if rates go up 1, 2 or 3 percent while you’re waiting to “time the market?” What will you actually save?
We know that mortgage interest rates are at historical lows and will be going up. The question is “When will they go up? The window of opportunity for low rates may be only slightly opened. So, if you are thinking of buying your first home, a move-up home, a vacation home, downsizing or an investment property, right now may be your very best time to do so. Otherwise, it could end up costing you more…a lot more as rates begin to climb.
By:Greg Blatt

Foreclosure Alternative: The Short Sale

A short sale is far from hassle-free, but it's a better alternative than foreclosure. And now you've got a little help from your friends in D.C. Here are the facts about short sales and how to get started.

Short sales get government incentives

Although short sales are not hassle-free, at least you've got the government backing you. The Home Affordable Foreclosure Alternatives (HAFA) program provides financial incentives for lenders and borrowers to avoid foreclosure through short sales or deeds in lieu of foreclosures. 

Participation in the HAFA program requires adherence to guidelines--including a standard process and minimum timeframes--that speed the process, says Dallas-based REALTOR® Tom Branch, co-author of Avoiding Foreclosure: The Field Guide to Short Sales. The HAFA program is for homeowners who can't keep their homes with the help of a loan modification.

Advantages of a short sale

• You can be a homeowner again more quickly with a short sale in your past than with a foreclosure. New Fannie Mae guidelines help you qualify for a new mortgage in as little as two years after a short sale, as opposed to up to seven years after a foreclosure.

• You will have more time to make relocation plans and save money than with a deed in lieu. A short sale may take four to 12 months. A deed in lieu of foreclosure arrangement typically requires you vacate your home within 30 to 60 days of signing, according to real estate attorney Lance Churchill.

• You can receive up to $3,000 from your lender for moving expenses at the time of closing of a HAFA short sale or a HAFA deed in lieu of foreclosure. Relocation funds are part of the incentives of HAFA, but not necessarily for other short sale or deed in lieu programs of the lenders.

• You can help your community's home values. Because the lender often receives a higher amount of the remaining loan balance than it would from the sale of a home after a foreclosure, short sales help support home values in the surrounding community.

Disadvantages of a short sale

• Your credit score will take a severe hit. But that would happen anyway with a foreclosure. Fair Isaac, creator of the FICO score, says foreclosure and short sales have virtually identical impacts on your credit score. VantageScore--a company that has created a credit score model for consumers--says a short sale will lead to only a marginally lighter hit when compared with foreclosure. 

• You may owe additional taxes. In the past, if your outstanding mortgage was $100,000 and your lender accepted a short-sale purchase offer of $90,000, you were liable for income tax on the forgiven $10,000, says Harlan D. Platt, economist and professor of finance at Northeastern University in Boston. However, the Mortgage Forgiveness Debt Relief Act of 2007, which runs through 2012, generally allows taxpayers to exclude income from the discharge of debt on their principal residence in some circumstances. Full relief is available only if the amount of forgiven debt doesn't exceed the debt that was used to acquire, construct, or rehabilitate a principal residence. Consult a tax professional and an attorney to minimize or avoid this liability.

• In some states, your lender may still be able to come after you for the difference between the short sale price and the amount needed to pay off the mortgage. Your actual agreement with your lender and state and local laws and regulations spell out the details. Consult a tax professional and an attorney to minimize or avoid this liability. 

How to proceed with a short sale

• Find a qualified REALTOR® experienced in short sales. Short sales are tough to navigate, and they're further complicated by your loan type--FHA vs. Veterans Administration vs. conventional loans. Real estate agents who specialize in short sales will know the proper steps and order of the steps involved. They'll also be able to navigate the many parties involved in the process and over-burdened loss mitigation departments. Look especially for agents who have Short Sales and Foreclosure Resource (SFR) Certification, which requires specialized training.

• Gather evidence to support your need for a short sale as opposed to a foreclosure. You'll need to prove that you have little or no equity in your home, you're behind on your payments, and you're no longer able to afford your home. You'll need to write a hardship letter to the lender describing your circumstances, such as a divorce, job loss, illness, death, or other event that has impacted your income.

A short sale can be a time-consuming process, but if you can avoid foreclosure, it's worth it in the long run.
By: Gwen Moran

What Affects Credit Scores? 7 Misconceptions

If you’re trying to raise your credit score to get a good rate for a refinance or HELOC, you might be surprised by what affects—or doesn’t affect—your score.

More money improves your credit score

False. Your level or sources of income don’t affect your credit score, although lenders may look at it when making loan decisions, according to the Fair Isaac Corp., the company that issues the commonly used FICO credit scores.

Ownership of several credit cards can hurt your credit score

Mostly false. Having many credit lines isn’t necessarily a bad thing, says credit expert Liz Weston, author of Your Credit Score. Multiple lines give you a favorable debt-to-available-credit ratio. But use them correctly: It’s best to keep any balances below 10% or 20% of the total credit line, she says. Anything more will affect the ratio of debt-to-available-credit, which can decrease your credit score.

Opening and closing credit lines can hurt your credit score

True. New credit applications can decrease your credit score, so be careful about applying for new credit cards or personal loans before applying for a HELOC, second mortgage, automobile loan, or other large line of credit.
Surprise: Closing existing credit lines may also hurt your credit score, since it’ll damage your debt-to-available-credit ratio. A good rule is not to make any credit changes in the months leading up to a major credit request, such as for a HELOC.

Consolidating credit lines will help your credit score

Mostly false. Although it may seem like a good idea to move all your balances to one card, that can actually hurt your credit score, since your debt-to-available-credit ratio will spike on that card, says Weston.
However, credit expert Harrine Freeman says such a slight decline isn’t necessarily a deal-breaker for a loan, especially if the card has a lower interest rate and will allow you to pay off the balance sooner. Your score will increase as soon as that ratio goes down.

Changing jobs can hurt your credit score

Partly true. Taking a new job or losing your job doesn’t affect your credit score. However, if you have a spotty employment history, lenders may hold that against you in making a loan. Dips in income may signal that it could be difficult to pay bills in a timely manner.

Co-signing for others can hurt your credit score

Partly true. Simply co-signing on a loan for someone else may not affect your score, but if that person is late on paying the loan, it’s likely to show up on your report, says Freeman. And that’s a nasty surprise if you didn’t know the person was late.

Judgments and liens aren’t considered in your credit score

False. If you’ve had a judgment or lien filed against you, it’s considered in your payment history, which represents 35% of your score.
Similarly, while most utility companies don’t report payment history to credit bureaus, your account will likely be reported if it is seriously delinquent and referred to a collection agency.
Additional details on how to manage your FICO score are available on the FICO site.
By; Gwen Moran

7 Home Owners Insurance Tips

1. Make sure you can rebuild all, not just part of, your house

Don’t make the mistake of assuming that just because your home’s value has gone down that the cost of materials and labor have gone down, too. For example, home construction costs rose 1.3% from January 2009 to January 2010, according to construction cost consultants Marshall and Swift/Boeckh, even while many homes were falling in value. Make sure your home owners insurance pays you for full rebuilding costs in the event of a disaster.

2. Check your flood insurance

The National Flood Insurance Program can help by making affordable flood insurance available, but there are limits to how much coverage you can get, and it isn’t available everywhere. In addition, the NFIP has only been approved for a series of short-term renewals. (That is, Congress has been extending its provisions for only short periods and has not committed to making it permanent.)  Keep an eye on the NFIP to make sure the program remains in force.
If you can’t participate in NFIP or need more extensive coverage, see if you can buy flood insurance from your existing carrier. Flood insurance rarely comes with a standard home owners policy.

3. What’s new in your life?

If you’re recently divorced, and you got the house, make sure your ex-spouse’s name is off the policy. Did you build a playground for your children? Install a swimming pool? These may change your liability needs. Talk to your agent and compare your life status this year with last year’s to update your home owners insurance.

4. Maybe your valuables are worth more

Your art, jewelry, antiques, and other collectibles may have appreciated in value over the years. If your home owners insurance policy doesn’t have accurate values on these items, your company may not reimburse you for the full value in the event of fire or other home disaster.

5. Tally up any home improvements

Have you made any renovations or additions to the home, such as an expanded garage, new bathroom, or home theater in the basement? Your house may now be worth more and your home owners insurance needs to reflect that. Create a home inventory video and keep it in a safe place outside the home.

6. Give your trees the once-over

Hire an arborist to look at the trees on your property, and check with your home owners insurance agent to see if your policy covers you if one of your trees falls on the neighbor’s car. An arborist can tell you if your trees are healthy and advise whether they should be removed or trimmed.

7. Watch the nickels and dimes

Hunt for any special discounts that can reduce your home owners insurance premiums. For example, you may be eligible for a discount if you have an automobile or valuable articles policy with the same company has your home owners insurance policy.
These home features can also give you discounts on your home owners insurance–but only if your insurer knows you have them:

• Burglar or fire alarms

• Gated community patrol service

• Storm shutters

• Temperature monitoring system to protect against freezing, connected to a central station alarm

• Permanently installed, electrical back-up generator

By Richard Koreto

How Do Interest Rates Affect Buying Power?

In today’s volatile real estate market, I am often asked by buyers: “Should I wait until the market ‘bottoms out’ before I purchase, or should I act now?” The best answer is…”That depends.” It depends on what you want to accomplish. Are you simply wanting to get the “cheapest price” on a house or are you more concerned about what your housing costs will be over the long term? As you know, there is a huge difference between “price” and “costs.”

First of all, it is impossible to actually “time” the market to the point of buying a home at the absolute “bottom” of the market. In the meantime, while you wait to “buy at the bottom,” what happens if interest rates go up? (and they will!) Let’s assume you want to purchase a median priced home at $250,000. If interest rates go up by just 1/4 of one percent (.25%), you will need to earn an additional three percent (3%) in income to qualify for the same $250,000 house. If you don’t expect your income to go up by 3%, then you must purchase a home priced 3% less. What’s worse, for every .25% increase in interest, it ends up costing you an additional $9,518 in interest payments over the course of the loan. Now, if rates go up by one full percentage point (1%), that would cost you $38,072 in additional interest over the life of the loan. What if rates go up 1, 2 or 3 percent while you’re waiting to “time the market?” What will you actually save?

We know that mortgage interest rates are at historical lows and will be going up. The question is “When will they go up? The window of opportunity for low rates may be only slightly opened. So, if you are thinking of buying your first home, a move-up home, a vacation home, downsizing or an investment property, right now may be your very best time to do so. Otherwise, it could end up costing you more…a lot more as rates begin to climb.

Home Improvement Apps for iPhone, Android, and BlackBerry: Your Digital Toolbox

Downloadable iPhone and Android apps offer ways to maintain, improve, and save money on your home.

Match that paint color

If you see a color at a friend’s house that would look great in your home, use Benjamin Moore’s Ben Color Capture or Sherwin-Williams’ ColorSnap, free mobile apps for iPhone, to conjure up a matching paint color and code in a jiffy. Take a photo with your phone, and the app matches the paint as closely as possible, and will display secondary and complementary colors. (ColorSnap is also available for BlackBerry.)

Get rid of stains

Good Housekeeping magazine has placed all their best stain-removal and cleaning advice into their free @Home app. It also includes decorating ideas and a searchable list of the 5,000-plus products that have earned a Good Housekeeping seal.

Look for recycled stuff

If you’re searching for a cheap replacement part, or looking for a deal on slightly-used appliances and materials, eBay’s free Mobile app lets you search the auction site’s entire marketplace from iPhone, Android, Windows Phone 7, and BlackBerry devices. You can also put any of your disused-but-functional household items up for sale and recoup some cash.
For listings close to home, search the popular Craigslist site through the free Craigsnotifica for Android or Craigspro for iPhone.

Price comparison

Finding lower prices on electronics and appliances used to mean driving from store to store or scanning Sunday circulars. With the free Price Check by Amazon, you can scan a product’s barcode at a store and compare the price against Amazon and other merchants. (Android and BlackBerry versions are also available.) PriceGrabber has a similar app for iPhone and Android.

Carpenter’s tools in one

For $1.99, the iHandy Carpenter app puts a ruler, protractor, bubble level, surface level, and plumb bob into your iPhone, allowing you to make measurements without lugging out the tool box. It’s perfect for simple jobs like hanging frames and mirrors.
Need just a level? There’s a free app for iPhone from iHandy and for Android from Johnson.

Calculate materials you’ll need

Before you approach a home improvement project, use the $1.99 Handy Man DIY to record dimensions of flooring, windows, walls, and more. It calculates how much material you’ll need and gives you a cost estimate.

Order supplies

If you’re in the middle of a home improvement job and need supplies, use the $4.99 Work Shop app to order them from your iPhone. It’s also a great tool for keep track of expenses or plan your budget for a future project.

Light the way

With the iPhone’s bright display and the super-bright LED flash, you can use it in place of a traditional flashlight to illuminate crawl spaces, attics, cabinet recesses, and other dark spots. There are many apps for this purpose, but two favorites are the 99-cent Flashlight (and 99-cent Flashlight+.

Know what and when to plant

Wonder why certain vegetation isn’t growing in your yard? Landscaper’s Companion provides a reference guide to more than 2,000 plants. You can search for a plant based on your garden’s sun exposure and garden zone, helping to ensure you won’t get any dead leaves after planting. The app costs $9.99.

Find a stud

Using your iPhone’s magnetometer, StudFinderPRO can help you locate studs by locating the magnetic fields emitted by metal objects like screws and nails. The app costs $2.99. A free Magnetic Stud Finder is available for Android devices.

Hire a virtual designer

Need decorating ideas for inspiration? Check out Home Interior Layout Designer–Mark On Call for $2.99. Created by an interior designer, the app can help you plan a space and determine if furnishings will fit. Also consider the $4.99 Living Room app for iPad and the 99-cent Dream Home app for iPhone. 

A writer covering the latest technologies and trends for a variety of national publications, Les Shu is currently automating his home with the newest doodads to make it smarter than he is.

 By;Les Shu

5 Tips For Making A Fixer-Upper Pay Off

The majority of fixer-uppers are in complete disrepair, meaning that it will cost you more to “fix it up” than to purchase a home in move-in condition.

However, if you are serious about buying a sound fixer-upper, here are a five tips on finding a sound fixer-upper:
1) Look in neighborhoods with resale potential.
2) Try to find a home that has been listed for sale for more than 90 days.
3) Always estimate your fix up costs before buying.
4) Avoid homes requiring structural improvements.
5) Avoid major additions, such as adding a family room or bedroom.
The industry standard rule of thumb is to buy a fixer-upper for at least 20 to 30 percent below its “fixed-up” market value. It’s important to avoid both under-improving and over-improving a fixer-upper; in either situation you will not realize a good return on your investment.

Get Your Finances in Order: To-Do List

1. Develop a household budget. Instead of creating a budget of what you’d like to spend, use receipts to create a budget that reflects your actual spending habits over the last several months. This approach will factor in unexpected expenses, such as car repairs, as well as predictable costs such as rent, utility bills, and groceries.

2. Reduce your debt. Lenders generally look for a total debt load of no more than 36 percent of income. This figure includes your mortgage, which typically ranges between 25 and 28 percent of your net household income. So you need to get monthly payments on the rest of your installment debt — car loans, student loans, and revolving balances on credit cards — down to between 8 and 10 percent of your net monthly income.
3. Look for ways to save. You probably know how much you spend on rent and utilities, but little expenses add up, too. Try writing down everything you spend for one month. You’ll probably spot some great ways to save, whether it’s cutting out that morning trip to Starbucks or eating dinner at home more often.

4. Increase your income. Now’s the time to ask for a raise! If that’s not an option, you may want to consider taking on a second job to get your income at a level high enough to qualify for the home you want.
5. Save for a down payment. Designate a certain amount of money each month to put away in your savings account. Although it’s possible to get a mortgage with only 5 percent down, or even less, you can usually get a better rate if you put down a larger percentage of the total purchase.
6. Keep your job. While you don’t need to be in the same job forever to qualify for a home loan, having a job for less than two years may mean you have to pay a higher interest rate.
7. Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills, too. Pay off the entire balance promptly

Reprinted from REALTOR® magazine (REALTOR.org/realtormag) with permission of the NATIONAL ASSOCIATION OF REALTORS®.

Second Chance for Owners Who Lost Homes

More than 2 million home owners who were foreclosed on or were in the process of a foreclosure during 2009 or 2010 can now ask for a review of their case, banking regulators announced this week.

The move is to help identify home owners who may have been improperly foreclosed upon, Julie Williams, chief counsel of the Office of the Comptroller of the Currency, said at a congressional hearing.
Home owners who ask for the review will receive a letter explaining their rights.
Mortgage servicers will hire independent auditors to conduct reviews of the cases and determine if home owners should receive financial compensation if the foreclosures were not done properly. They will also look for borrowers who were denied loan modifications when they may have been eligible for one.
The reviews are part of the mortgage servicer requirements called for by regulators after an investigation last fall revealed improper foreclosure practices by banks. Banks have until Wednesday to submit plans to the OCC on how they plan to revamp foreclosure practices

8 Tips to Guide for Your Home Search

1. Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you’d be willing to spend each month for housing.

2. Be realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There’s no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.
3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can’t afford.
4. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.
5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.
6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you’ll buy as well as the type of mortgage terms that will best suit you.
7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.
8. Get help from a REALTOR®.Hire a real estate professional who specializes in buyer representation. Unlike a listing agent, whose first duty is to the seller, a buyer’s representative is working only for you. Buyer’s reps are usually paid out of the seller’s commission payment.

Nick Smith
Slivercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
http://www.real1smith.com/

Understand Agency Relationships

It’s important to understand what legal responsibilities your real estate salesperson has to you and to other parties in the transaction. Ask what type of agency relationship your agent has with you:

Seller’s representative (also known as a listing agent or seller’s agent)
A seller’s agent is hired by and represents the seller. All fiduciary duties are owed to the seller. The agency relationship usually is created by a listing contract.

Buyer’s representative (also known as a buyer’s agent)
A buyer’s agent is hired by prospective buyers to represent them in a real estate transaction. The buyer’s rep works in the buyer’s best interest throughout the transaction and owes fiduciary duties to the buyer. The buyer can pay the licensee directly through a negotiated fee, or the buyer’s rep may be paid by the seller or through a commission split with the seller’s agent.

Subagent
A subagent owes the same fiduciary duties to the agent’s customer as the agent does. Subagency usually arises when a cooperating sales associate from another brokerage, who is not the buyer’s agent, shows property to a buyer. In such a case, the subagent works with the buyer as a customer but owes fiduciary duties to the listing broker and the seller. Although a subagent cannot assist the buyer in any way that would be detrimental to the seller, a buyer-customer can expect to be treated honestly by the subagent. It is important that subagents fully explain their duties to buyers.

Disclosed dual agent
Dual agency is a relationship in which the brokerage firm represents both the buyer and the seller in the same real estate transaction. Dual agency relationships do not carry with them all of the traditional fiduciary duties to clients. Instead, dual agents owe limited fiduciary duties. Because of the potential for conflicts of interest in a dual-agency relationship, it’s vital that all parties give their informed consent. In many states, this consent must be in writing. Disclosed dual agency, in which both the buyer and the seller are told that the agent is representing both of them, is legal in most states.

Designated agent (also called appointed agent)
This is a brokerage practice that allows the managing broker to designate which licensees in the brokerage will act as an agent of the seller and which will act as an agent of the buyer. Designated agency avoids the problem of creating a dual-agency relationship for licensees at the brokerage. The designated agents give their clients full representation, with all of the attendant fiduciary duties. The broker still has the responsibility of supervising both groups of licensees.

Nonagency relationship (called, among other things, a transaction broker or facilitator)
Some states permit a real estate licensee to have a type of nonagency relationship with a consumer. These relationships vary considerably from state to state, both as to the duties owed to the consumer and the name used to describe them. Very generally, the duties owed to the consumer in a nonagency relationship are less than the complete, traditional fiduciary duties of an agency relationship.

Welcome Good Neighbor! National Night Out

Great neighborhoods are the cornerstones of a livable city. Boise is fortunate to have a thriving network of active neighborhoods in all parts of the city. To celebrate and support Boise’s neighborhoods, the City is proud to announce a series of programs to strengthen the ties between Boise residents, to establish new connections within our community and to honor residents who set an example of how good neighbors can improve and enhance our community.

The program begins with National Night Out on Tuesday, August 2, and culminates with National Good Neighbor Day, which will be celebrated in Boise at the Main Library on Wednesday, September 28. In between will be multiple Neighborhood Block Parties, a Neighborhood Summit and other ways to celebrate the neighborhood bonds we share.

Good neighbors are those who have gone out of their way to help those around them. If you know someone who deserves to be recognized as a Good Neighbor, nominate him or her for a Good Neighbor Award by September 11, 2011. Mayor David H. Bieter will honor nominees at the National Good Neighbor Day event on September 28. For more information or to get the nomination form, go to : Good Neighbor Nomination

The Importance Of Home Inspections

Finding a home does not mean that your investigative duties are over. Although most states( including Idaho) do not have required inspections.

 But what about full home inspections? Are they worth it? In most cases, the answer is YES. Although you will have to pay for a home inspection, it may save you a lot of money in the long run.

 A thorough home inspection will include checking the following:

• Electrical systems
• Heating and cooling systems
• Foundation
• Siding
• Structural elements
• Roof
• Insulation
• Doors and windows, and
• Plumbing

 If you are buying a new or used home, it is best to have a home inspection before signing the final paperwork. Once the inspection report comes back, you will the opportunity to ask the homeowners for a price reduction, go ahead and buy the home anyway, or ask the homeowners to make the necessary repairs.
 You will receive a varied reaction from homeowners. Many times, they will agree to lower the price a little.
 When drawing up an initial offer for the purchase of the home, you should include a statement that allows you to withdraw your bid if any repairs are not taken care of or the price is not lowered due to the findings by the home inspector.
 If the contract does not include this, then you can still withdraw from the bid, but you may owe the agent commission fees.
 Having a home inspection will give you peace of mind when you are buying a home. Since you will be taking out a mortgage, it is important to know what you will be buying, and the amount of money you will have to invest after purchasing the home.
 A home inspection will also help you make your final decision whether to purchase the home or to keep looking for another.

Nick Smith
Slivercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
http://www.real1smith.com/

Preparing To See Homes With Your Realtor

Create A List

 Once you have found a realtor you are comfortable with, you will want to make the most of your time when house hunting. Giving your realtor a list of what you are looking for will help narrow the search and save everyone some time. Your list should include:

• Your price range
• Number of bedrooms you want
• Number of bathrooms
• Size of property
• Basement (finished or unfinished)
• If you want a porch, patio or balcony
• Central heat and air conditioning
• Garage
• Neighborhood, and
• Any other amenities you would like

Giving your real estate agent a list of your preferences will allow them to spend more time researching homes that fit the criteria. You should list these amenities from greatest to least important because no home is perfect and you will not get everything you want or need. Let your agent know that you are flexible, but that you really want to concentrate on certain items when looking for a home.

Nick SmithSlivercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
http://real1smith.com/

Location Is Everything

One of the greatest factors in regards to overall costs of property is in the neighborhood or area itself. 

In real estate, location is everything and depending on what your personal preferences are, you should expect the costs of properties to change based on location, even when all other features and factors are similar.
For example, if you choose to live just outside of a city zone, a property of the same age and size could be as much as $50,000 cheaper than a property inside of a city zone.  
You will also want to consider what is available in different areas, based on what is most important to you.   Are there grocery stores local to the neighborhoods you are evaluating?  Are there late night conveniences?  Entertainment?  Doctors? Schools?
All of these factors will influence your decision to buy within certain areas, and if you have small children, you’ll also want to consider the quality of the schools in the same way that if you require regular medical treatment, you’ll want to make sure that there are medical facilities near your home.
For many homebuyers, location is the most important component when choosing a property and it’s also the key factor in which they spend the most time evaluating.   You want the conveniences that are of most importance to you!
If you are considering purchasing a property outside of a city zone based on the savings, you’ll also want to make sure that the lower property rate is justified based on the costs to commute.
 On the other hand, if you are interested in living within city limits, you will want to pay attention to additional costs and factors such as metered water, sewage costs, pet restrictions and any by-laws that you may be affected by.
For example, in many cities there are bylaws preventing residents from having too many pets, and believe it or not, there are even bylaws that indicate what color you can paint your home!
So be careful in choosing a neighborhood just based on cost alone. You will want to discuss any bylaws or restrictions applied to an area with your realtor before making an offer on a property.
When considering different locations, you will want to try to spend some time in each area, so that you are able to get a personal feel for the neighborhood.
 Consider staying in a nearby bed & breakfast or a hotel for a weekend, so that you can explore the area, walk through the neighborhoods, visit nearby attractions, restaurants, parks, and even speak with the locals.
 While many people overlook this simple step, it can really make a difference in helping you choose an area where you feel safe, relaxed and truly connected to.
If you have children, you will also want to include them in making your decision. Spend some family time around the different areas that you are considering so that there are few surprises when you move in.
 Pay attention the proximity of nearby schools, whether there are local events for your children based on their interests, whether you will be close to amenities or areas that you’ll visit frequently, and whether you can really see yourself living in an area for a long period of time.
 When considering whether to purchase a home in the country, city or suburbs, weigh the pro’s and con’s of all three areas, to gain a better idea as to what is suitable for your family.
City living carries many different benefits, including:

• Quick & Easy access to local events.
• Extended business hours for many different amenities.
• More options for stores, restaurants and schools.
• Public transportation.
• Typically offers more cultural events, concerts, attractions.

Just the same, there are also cons to living in the city as well, including:

• Higher population.
• Less property.
• Higher housing costs.
• Higher taxes.
• Higher crime rate.
• Higher pollution rate.
• Limiting housing available.

If considering buying a house in the country, you will also want to weigh the pro’s and con’s including:
Pros:

• More property available.
• Lower tax costs.
• Less population.
• Not as many zoning issues or bylaws.
• Overall cost of living is lower.

Cons:

• Fewer amenities available.
• Further commute to work and shopping.
• Fewer schools & businesses to choose from.
• Issues dealing with wells, septic systems, etc
• Less entertainment, cultural events.

Other Location Considerations

• Weather & Climate
• Road conditions
• Location of property in the neighborhood, and
• Room to expand

You should be thinking ahead in terms of the weather. If you are planning on living in the country, for example, you should pay attention to possible flooding, snow, and other weather that could affect you getting to work.
 If the road is a dirt road, you should ask if the county will clear the road and how often they will do so. This is another advantage of living in the city because you could always use public transportation if you do not want to drive.
 The location of the property is also important. If the property is located at the bottom of a slope, you may have flooding issues after a rainstorm. Also, as your family grows, you may need more room.
 You should find property that can hold a home addition if necessary. Investing in a home requires a great deal of thought and planning. Even if you do not have a family, you should find a home that will allow you to grow as your interests change.
 If you are planning on taking out a mortgage, you will find it difficult to move abruptly in the event you discover that an area isn’t quite what you expected, so the more time you spend personally evaluating the neighborhoods and areas you are interested in, the more prepared you will be to make an informed decision.
Another important thing to keep in mind is the crime rate of specific areas.  You can identify and potential problems or higher crime rates by researching areas online.  You can also talk to your realtor about any concerns you have over crime rates, and make sure to compare crime rates to other neighborhoods.
You also want to pay attention to your ‘gut instinct’ and how you personally feel about an area, when it comes to choosing a property: 
Does a certain neighborhood give you a sense of calm? Does it provoke a positive feeling? Good memories?  Does it seem clean and friendly?
And depending on your lifestyle, you will also want to pay attention to other contributing factors including:

• Is there high speed Internet available?
• Is there cable television available?
• Are there ponds, rivers, lakes or oceans nearby?
• Are there 24-hour conveniences? (drug stores, grocery stores, etc)
• Is the neighborhood aesthetically pleasing?
• Is there garbage pickup?
• What is the average value of a home in that neighborhood?

All of these things will play a part in helping you to decide whether a specific property is suitable for your family, so take the time to research the different locations and start taking notes regarding your findings.
Having this information readily available will provide you with a snapshot of the different properties and locations that you are considering, making it easier to come to a decision later on.

New Homes vs. Older Homes

Older homes can be more affordable, however you may also be faced with costly repairs, such as replacing old equipment so that it’s up to code.  Older homes often carry higher insurance rates because of an increased risk of repairs.

On the other hand, older homes can make for great starter houses, if you have the ability to do a lot of the repairs yourself.  And in many cases,  you can end up buying a larger house at a fraction of the cost in comparison with a newer home. 

In addition, many people prefer mature properties because of the history surrounding the property, as well as existing vegetation, trees, and greenery, which provides privacy, while often giving buyers the opportunity to purchase more land for future development, than with a newer model.
But there are many pro’s and con’s to both a new and older home and it’s important that you fully understand everything about the properties that you are considering. Get as much history on the property as possible.

Ask the realtor for information about the home, talk to neighbors, check out sale history by searching online.

Reviewing the history of sale transactions on a home can often give you a good idea as to whether there were problems with the property, especially if it’s been sold multiple times over a short period of time.
Also keep in mind that newer homes include a warranty, protecting you from unforeseen costs in repairs (such as roofing or flooring), while older homes will typically be sold “as is”.
When purchasing an older home, you want to make sure that you pay an inspection company to thoroughly inspect the property, including roofing, heating, electrical outlets, and whether the property is up to code including the type of wiring found throughout the property.
While it’s important to have a home inspection on both new and older homes, if the property is aged, you will want to make sure the inspection includes elements that may not be typically included in an inspection process for a newer home.
Moving into your new home should be an exciting and memorable time in your life, and if you really give yourself enough time to evaluate different properties, and you keep an open mind with both newer and older homes, you’ll be in a better position to get the most ‘bang for your buck’, while ending up with a home that you are happy with for years to come.

Questions to Ask When Choosing Your REALTOR®

Make sure you choose a REALTOR® who will provide top-notch service and meet your unique needs.  

 How long have you been in residential real estate sales? Is it your full-time job? While experience is no guarantee of skill, real estate — like many other professions — is mostly learned on the job.

 How many homes did you and your real estate brokerage sell last year? By asking this question, you’ll get a good idea of how much experience the practitioner has.

How many days did it take you to sell the average home? How did that compare to the overall market?  The REALTOR® you interview should have these facts on hand, and be able to present market statistics from the local MLS to provide a comparison.

How close to the initial asking prices of the homes you sold were the final sale prices? This is one indication of how skilled the REALTOR® is at pricing homes and marketing to suitable buyers. Of course, other factors also may be at play, including an exceptionally hot or cool real estate market.

 What types of specific marketing systems and approaches will you use to sell my home? You don’t want someone who’s going to put a For Sale sign in the yard and hope for the best. Look for someone who has aggressive and innovative approaches, and knows how to market your property competitively on the Internet. Buyers today want information fast, so it’s important that your REALTOR® is responsive.

Can you recommend service providers who can help me obtain a mortgage, make home repairs, and help with other things I need done? Because REALTORS® are immersed in the industry, they’re wonderful resources as you seek lenders, home improvement companies, and other home service providers. Practitioners should generally recommend more than one provider and let you know if they have any special relationship with or receive compensation from any of the providers.

 What type of support and supervision does your brokerage office provide to you? Having resources such as in-house support staff, and assistance with technology can help an agent sell your home.

 What’s your business philosophy? While there’s no right answer to this question, the response will help you assess what’s important to the agent and determine how closely the agent’s goals and business emphasis mesh with your own.

How will you keep me informed about the progress of my transaction? How frequently? Again, this is not a question with a correct answer, but how you judge the response will reflect your own desires. Do you want updates twice a week or do you prefer not to be bothered unless there’s a hot prospect? Do you prefer phone, e-mail, or a personal visit?

Could you please give me the names and phone numbers of your three most recent clients? Ask recent clients if they would work with this REALTOR® again. Find out whether they were pleased with the communication style, follow-up, and work ethic of the REALTOR®.

Getting Your House Ready to Sell

How can a buyer get interest for purchasing your house? Impression is the keyword. You just need to get your house ready to sell by doing some preparation. Get inspected by a professional if you want to pay a little effort for maximum results, or if you don’t want to spend much money by paying professional you can do by yourself for getting your house ready to sell.

Now that become a question, how to get your house impressed a buyer? Those are the steps for getting your house ready to sell to a buyer.

Beautify your exteriorWhat you do is just beautifying. The goal is to make your exterior look pretty and fresh to impress your buyer. Just to inform you that the exterior becomes the first impression to overlook a house. There are two sensory organs of a buyer you must impress. Those are eyes and nose. By bringing the garden homelike condition to your house exterior, making it looked pretty and freshening it up. The steps you can do are:
- Get the grass, trees, flowers, and plants tidy and fresh by mowing and watering it
- Clean up the curb and entering path and put the potted flower in the sides.
- Freshen up the smells by put scented potpourri.
- Clean up all of windows and entering doors.
- Get rid of equipments out of sights.
- Paint the walls if necessary.
Make the Cosy Interior
After buyer got impression from your house exterior, do some simple works to get the cosiness of your house interior. It aims to make a buyer feel homelike buy entering your house. These are the steps:
- Clean up the tile floors; scrub it if there are some bad spots.
- Get rid of spider net from your ceilings.
- Wash the carpets with a fragrant soap.
- Get your furniture placed tidily and gets rid of unnecessary one.
- Brush the closets
- Clean the garage, basement, and attic
- Get the windows opened and clean, it will bring freshness to your house inside
- If you have pets, bath them.
- Put some fresh fragrance in air conditioner.
Repairing and ReplacingSome Repairing and replacement is necessary to do, if there are some broken furniture, equipment, or appliances. Just check out:
- broken or missing door
- cabinet handles
- ceilings
- ventilation filters
- broken tiles in bathroom and kitchen
- faucet
- wallpaper
- some furniture
Get your friends’ opinion
Assume some friends like a buyer, and get some advice and suggestion to make your house get more ready to sell. And the most important thing is your friends feel your home like their own home.

Nick SmithSlivercreek Realty Group
Cell 208-859-6590
Fax 208-319-8969
RealOneSmith@gmail.com
http://real1smith.com/