Taylor-made

5 Common mistakes in choosing a lender

2006-10-28T16:21:00.000-05:00

Buying a home is a big deal, there's not two ways about it. As much as you want to make sure you get the best mortgage possible, don't fall into these common pitfalls:

Rate shopping without interviewing: Sure, go ahead and look around for the best rate, but don't get sucked into a lender who advertised a low, low rate only to find out that their "low, low rate" is only if you have perfect credit or pay fees up-front. You want a lender who will work with you and your financial situation, not just slap a rate in front of you and tell you it's good. Take the time to do the legwork, and homework, required to make sure you get the rate and lender best suited for you.
Skipping out on getting pre-approved: Although this isn't always required, it may be in some cases. And even when it's not, it's a good idea to go ahead and get pre-approved - this will give you added confidence as you shop.
Waiting to have perfect credit: The requirements of having perfect credit and a 20% down payment for your home are myths. There are many opportunities and loans available to those with less than perfect credit, and allow for no or little money down. Don't keep putting of purchasing a home because of your credit - you may be waiting a long time!
Choosing a lender by direction of your realtor: If you really trust your realtor, go ahead, but many times there is a relationship in play between the two of them that may or may not be in your best interest. Make sure to interview your potential lender, don't just take the first one recommended to you.
Not being completely honest with your lender: Believe it or not, even though your mortgage company is in the money-making business, they aren't out to get you. They know and understand that everyone has had bumps in their financial past. But when you aren't honest with them, it will come out in the end, and it may hurt you more than you realize. Be honest from the start and remember, they don't make money unless you're approved for a loan through them, so they're really there to help you!

Don't forget, if you're unsure, ask! Your lender should be able to find a suitable loan program for you, not try to force you to accept one without explaining the whys and hows. Don't feel overwhelmed, just jump right in and before you know it you'll be signing the papers and holding the key to your own home!

Mistakes of a Home Seller

2006-10-18T14:39:00.000-05:00

When you're trying to sell you home, there are a lot of things you think about as the homeowner that can skew your idea of how awesome your home really is. Sometimes it's hard to take a step back and see your home as a potential buyer might, but it's critical if you're going to sell.
Here are some of the top mistakes homeowners make when trying to sell their house.

Asking price - when a homeowner bases their price on the original price they paid, based on the improvements they've made over the years, or based on the surrounding homes, the price can be either too high or too low. You need to take all these things into consideration. If in doubt, have it appraised.
Choosing a realtor - when you choose a realtor, don't base your decision solely on what they say they can "get" for your home. A realtor can't promise you anything, and if they don't have the qualifications, experience and contacts to back them up, chances are they won't be "getting" you anything for your house.
Neglecting the condition of the home - It's easy to look at your house through rose colored glasses, but if you neglect the shape it's in, potential buyers aren't likely to give it another chance. If there are repairs to be made, seriously consider taking care of them before putting it on the market.

A Home for Fido

2006-10-18T14:13:00.000-05:00

I know this is a little off topic, but when I saw this I just had to comment.

Now don't get me wrong, I'm an animal lover along with the best of them, but I just don't get it... I have a dog, a 6-year-old White German Shepherd. I love her to death even though she still acts like she's 6 months old and sheds like it's her mission in life to redecorate my house with fur. However, I just can't quite see laying down hundreds or even thousands of dollars for a dog-mansion for her when I'm still trying to finish my basement and seed my yard.

How people manage to justify this kind of expense is beyond me. I think maybe it goes under the "more money than they know what to do with" idea. Unfortunately, they do, because this article references several companies that gladly cater to the doggy-architecture niche. *sigh*

So much for giving to the needy, Spot needs a roof over his head.

Location vs. Economy

2006-10-16T09:19:00.000-05:00

When people look to buy a house, the catch-phrase is often "location, location, location." More likely than not, now days the idea should be "economy, economy, economy." Everyone knows that people consider the neighborhood a home is located in, families with children often consider the area schools, higher income buyers often like to consider location in regards to the local golf course or lake. But these days, what is really important when buying?

The state of the surrounding economy is something to really take into consideration when looking to purchase a house. Whether you plan to live in it or keep it as rental property, property value isn't always as easy to assess as it may seem. Speaking from personal experience, with a house in a dying mill area, when you do decide to move, it can be a nightmare to get rid of. Or, if the economy starts to pick up and you've bought a home that's in sad need of repair and decide later to sell, will the fixes required to make your home as profitable as it could be become too much of a burden to match the booming economy?

Before you buy, consider what drives the surrounding area as far as area business and where the income is coming from. For us, we were about an hour outside of Charlotte, and my husband commuted every day. Although we enjoyed a low, low house payment, we had to deal with losing at the very least 2 hours a day in driving, and now the area is slowly continuing a decline that has made our home sit on the market for 3 years. Should we have sucked it up and bought a more expensive home closer to Charlotte to save on vehicle upkeep and gas and possibly helped us get out from under it later? Who knows. Only you can decide what your personal best plan of action is, but do consider the future. It may come back to bite you.

Then again, the area our house is in could suddenly become the newest hot-spot outside of Charlotte. Somehow I doubt it, but one can always dream...

Natural Disasters create problems with insurance

2006-10-02T15:24:00.000-05:00

Among all the things you need to consider when buying a house is the additional costs after the house is officially "yours." One of the biggest added expenses is insurance. In this day, we are all more aware of the impact weather can have on property value, and although we can be informed about what areas are more prone to bad weather such as hurricanes, floods, and tornadoes, sometimes these natural disasters can't be avoided.

If you are looking to buy a home in an area that has proven to be a hotspot for weather-related tragedy, be aware that many insurance companies are making it harder to secure and retain insurance. In a years time, in Louisiana and Florida alone, over 600,000 homeowner's policies were either cancelled or not renewed. It would be easy to immediately blame Hurricane Katrina, but from 2004 to 2005, of the $75 billion of insurance loss reported, only $45 billion was specifically from Katrina. As much as $45 billion is a lot of money, that still leaves another $30 billion from other claims.

In fact, insurance claims have been such a cause for loss among insurance companies that in Massachusetts and New York, over 80,000 coastal homeowner policies were cancelled in the past two years, regardless of the fact that it has been years since they had a major hurricane.

The good news is that some insurance companies are looking for ways to help offset their loss and help their customers at the same time. One such option is "green" building credits and/or incentives. This option alone will not only help homeowners and insurance companies, but the environment as well. I'd say that's a good deal!

for related articles, see: Homeowners Fume in CT & Hurricane Preps in FL

Questions to ask your home inspector

2006-09-27T16:03:00.000-05:00

When you’re looking to buy a new home, one of the least fun things to check off your list is having the home inspected. However, with a good home inspector, this doesn’t need to be a painful task. Home inspectors are there to help you make sure you are getting the home you’re paying for, and that you know what you’re paying for. Don’t be afraid to ask them questions about their qualifications or during the inspection, regardless of how stupid they might seem to you. Here are some of the best questions to ask the inspector.

Who are you working for? Start off from the start with the knowledge that your inspector is there to serve you, not the realtor or the seller.
What kind of training and experience do you have? Knowing that your inspector has kept up-to-date with their training is very reassuring, and lets you know they care about doing a good job.
If there is a possible problem with drainage or a damp basement, ask if they have any tips to correct it. A lot of inspectors will have good suggestions.
Ask about the electrical wiring in the house. If it has been adjusted from the original wiring, they should be able to tell you if it was done properly, or if you want to add on later, if that will be an option.
Ask about the plumbing and septic systems. If the pipes appear older, they may need replacing sooner rather than later.

There are many questions that will come to mind as you walk through the house with the inspector. When you do ask, make sure you understand the answer, don’t just accept the reply and move on if you don’t. And don’t be afraid to admit that you don’t understand! This is a lot of money you’re investing and you need to be satisfied that you’ve done your homework!

Just remember that your inspector is there to help you. Don’t be afraid to ask to see their inspectors license if you feel the need. Most inspectors should be happy to answer your questions. But remember that although some problems are easily identified, they don’t have x-ray vision and cannot always tell if there is hidden damage to a house.

Beware Dual Agency

2006-09-18T09:57:00.000-05:00

As a seller, or a buyer, there are many things you'll be finding you don't know about the business of real estate. Questions like who really has to pay for closing costs what happens to my insurance if my house sits empty, and what can I really expect my real estate agent to do for me are just a few. One aspect of the real estate business you need to be aware of if dual agency. It sounds pretty harmless, and maybe there are a few agents out there that offer this that really do have their homeowners' and/or buyers' best interests in mind, but the case is that when it comes to people's money, things can get a little sticky.

In theory, a dual agent should work with the buyer and seller with complete loyalty to both, but think about it for a minute. If you're buying a house, you expect your agent to help you get the best deal you can - knowing that they'll make a commission off of what you pay. If you're selling a house, you expect your agent to help you make the most off of you sale as possible, also knowing that they'll make a commission off of what you make. If the agent is representing both sides, all of a sudden the middle-man is in a hard spot to adequately represent each client to the best of their ability.

Be educated and aware of this practice and make sure you don't get sucked into agreeing to dual agency before you understand what it means for you.

Quick Fixes for Your Home

2006-09-18T09:28:00.000-05:00

When trying to get your house ready to go on the market, sometimes it hurts to be critical of the place you've hung your heart and hat for years. But a critical eye can make a big difference - when you see your house from the viewpoint of a potential buyer, all of a sudden you start seeing things that maybe you overlooked before.

Instead of pouring a lot of money into your house - after all, you are going to be selling it - there are many ways you can improve the quality and appearance without eating up all of your potential profit. Things like new hardware on cabinets and doors, a fresh coat of paint, new panels for you kitchen appliances - these are all things you can do on a budget, and better yet, can do on your own.

Go through your house as if you were the prospective buyer and see what you would be critical of about the house. Is the lighting good? Is the basement nasty? Does the porch need a good cleaning? All things a weekend project could fix.

Also, keep an eye out for potential problems for customers. People often want to know that the house they're buying has been well taken care of. If you are a smoker, now would be a good time to take it outside (or quit). Check out your walls and see if they've been yellowed by the smoke - and don't forget to look at your carpets! If they hold the smoke-smell, a good shampoo will do wonders. Do you have pets? If so, see if you can arrange to have someone else keep them while you're trying to sell. If people see pets, or even signs of them, they often start to wonder where the hidden pee stains are.

It would be nice to think that everyone could see the potential of a home and not be afraid of the challenge of doing the work themselves, but if a little elbow grease gets your home up to buyers' ideals, it's worth it.

You can't live in 2 houses at once...

2006-09-08T09:36:00.000-05:00

One of my biggest fears when my husband and I decided to move was that our house wouldn't sell. It turned out that that fear wasn't unfounded, and our house still sits on the market today, after four years. Granted, the area we lived in was dying faster than the surrounding areas were growing to help our area pick up again, but it was more than that. The trend has risen, this year especially, where there is more supply than demand. More people are trying to sell their homes than are buying. That means that asking price isn't always the selling price, and for most people, you can only take so much of a loss.

The major downside to all of this is that more and more people are ending up with two house payments and two homes to take care of until their first home sells. Not only is this an obvious drain on the wallet, but it means upkeep on two houses, making sure there is no vandalism on an empty house, and worrying with the insurance company to insure an empty home.
At this time in the housing market, I think it's time we started to take a good look at why we're moving before we actually do. There are many reasons people move, but only a few actually require immediate action.

A lot of times, people just want something different, better, or newer. That's great - but you need to be confident that your current home won't drag you down if it doesn't sell immediately. Talk to your real estate agent and see what the current market looks like in your area. If you don't HAVE to move right now and the market is saturated with homes similar to yours, maybe it's a good idea to wait a little bit. There's a lot you can do in the meantime to improve your home without costing you a lot that may help increase the value and may even make you like the place a little more yourself. A fresh coat of paint, new fixtures, or some new landscaping can really brighten the place up.

If a move is necessary due to work or family issues, but you know that the market is not in your favor, consider signing up with a company to manage your property for you as a rental home until the market gets better. This will help you pay the bills on the first home while you pick up a second mortgage, and the house doesn't sit empty. This also works well with a rent-to-own option.

Before you decide to pick up and move across town to your dream home, consider all that it will cost you - not just the initial investment into the price of the house. Besides, who wants to pay for 3 bedrooms, 1.5 baths of storage space?

Stolen right off the house

2006-09-07T21:54:00.000-05:00

Thieves are getting braver and braver. Who would have guessed that now homeowners not only have to worry about their homes getting broken into, but their homes being vandalized in an attempt to steal something off of the very construction?
Apparently, as the price of metal has gone up, thieves have discovered that copper - a metal commonly used in housing for pipes and in air condition units - brings a good price. People nationwide have reported loss and damage to their homes that far outweighs the price the copper may actually bring the thief, because to replace a complete air condition unit or water piping underneath the house is well over the approximately $3 a pound copper brings at a scrap yard.
If you are a homeowner in an area where there have been reports of metal thefts, keep an eye out for the metal on your homes. Especially if you are a homeowner trying to sell a house that may be vacant or in the middle of construction on a house that isn't finished. With no one to keep an eye on the home, it makes it a more vulnerable target.
Although many law enforcement agencies and scrap dealers are taking steps to help cut down on the thefts, such as requiring legitimate identification from people selling the metal, and are notifying dealers when there is a large theft of metal, thefts continue. Unfortunately for homeowners, that means that even though their homeowners insurance may cover the damages, their deductible will still have to be paid - by the homeowners themselves. So beware if you hear something rattling around your air conditioning unit - be careful but don't assume it's the neighborhood raccoon. Keep a lookout and protect your copper!

Beware - Deed Scams!

2006-09-06T15:53:00.000-05:00

It's amazing to me how many different ways people find to take advantage of each other. I guess I shouldn't be surprised, but with all the paperwork you have to go through to purchase a house, it is sad to me that someone would try to make you worry that you don't have everything you need. If you have a good realtor, they should take care of the paperwork and make sure every "i" is dotted and "t" is crossed. Besides, it's their name and reputation if they don't help you make sure everything is legal and you as the customer is satisfied.
Apparently a new scam out now is for companies to offer "certified copies" of the deed to your home. In itself, this is not illegal, but considering you can go to your local county recorder of deeds for one - usually for a lot less - it sure is taking advantage of people. The letters that are being sent out sound very official, and some have even said intimidating, and people are paying almost three times what they really need to for a record that anyone can obtain.
If in doubt, check with your realtor or lawyer before shelling out the money!

Is your house Hollywood material?

2006-09-05T09:48:00.000-05:00

If you're one of those people who have spent your precious time and money to renovate, redecorate, and rejuvenate your home, or if you've just got an odd or interesting home, you may benefit from checking into listing your home with a listing agency or film commission.
Granted, there is a lot to consider about opening up your house to a production crew, but how neat would it be to go to the theatre and see your home on the big screen. Also, once your home has been featured, it may even bring in other business, such as photo shoots. Not to mention, once your home has made a name for itself, the desire for your home should go up considerable if you ever decide to sell. Doesn't seem like a bad prospect to me.

Home-for-sale for HOW LONG?

2006-09-05T09:38:00.000-05:00

As a homeowner who has a house on the market for sale - going on 4 years now - I'm interested in the trend of the housing market, and what makes some homes seem to go instantaneously while others (like mine) sit on the market forever. I know my house isn't someone's dream home, but it is a nice starter home. So what's the deal?
We have listed our property with at least 3 different realtors and tried the "for sale by owner" approach. Even after having several contracts on it, we still got nowhere as buyer after buyer backed out. We now have our home listed with a property management company, which is nice that we don't have to worry about it, but if they manage to sell it, we get nothing out of the deal except for the reassurance that we don't have to pay two house payments. How fair is that? Well, I guess it depends on how desperately you need to get out of a house payment. In our case, it was our last resort.
In this blog, I hope to take a look at what's going on and what people as buyers and sellers can expect. Also, maybe it will help educated us all. Who knows, maybe my house will even sell...