Real Estate Consumer Info.com

SMELL-A-VISION ~ WHAT PICTURES CAN'T CONVEY!  This is a follow up to the post I just wrote entitled A Picture Isn't Always Worth a 1,000 Words!  So often the minute I open the door to show a home, my nose is the first point of contact!  You know what I mean?  You walk in and ugh!  Pet odors, smoke, strange cooking smells, overuse of cleaning products, extremely STRONG candles or plug-ins, moldy smells, trash and the list goes on.

Yes the pictures and the write up can paint a lovely picture but the true test for me is how it SMELLS or doesn't smell!  As an agent, it is imperative that I convey this point to my Seller's.  The house MUST be clean and free of offensive odors.  And, you cannot simply MASK bad odors with flowery sprays and candles.  That only adds to the GAG factor.

Of course there are smells that evoke a sense of well-being and of "home".  Freshly baked cookies, clean and fresh scents are always odors that are friends of the olfactory senses.  The key is that they are not overwhelming.

When taking a listing, it is important to share this information with your clients.  They are used to how their home smells so they cannot possibly be the one to judge this.  You as the agent have to broach this subject as delicately yet confidently as possible.

Since Smell-A-Vision has not yet been invented, don't loose a potential sell due to odors!  THAT WOULD STINK!  ;)

Paula L. Hamilton ~ Broker/Director

    

Copyright 2010 Paula Hamilton

Let me start of by saying that this is satire. And this should be read with that idea in mind. It is intended to be humorous. Nothing more. Ok?

Let me also state that I have posted this before...but, its Friday. Im lazy.

As long as we understand one another, you can keep reading...

Common Man's Dictionary to Real Estate Advertising

1 car garage: Sure, you can drive your Ford Escort into the garage but there is no room to open the door.

Advertisement: A tool used by business to get money out of people that don't have it for something that they don't really need.

And much, much more: Truthfully, nothing else comes to mind. But, we can't tell you that.

Auditor: Person that arrives after battle to finish off the wounded.

Bank: Loan shark.

Beachfront property: No hurricane insurance available at any price.

Bedroom in basement: The basement has a 1' by 2' window you might be able to squeeze yourself through as an alternative to burning to death in a structure fire.

Bright and sunny: No window treatments or venetian blinds are included because previous owners simply nailed Pikachu blankets to the window frames.

BRILLIANT CONCEPT: Do you really need a two-story live oak tree in your 30-foot stained-glass sky dome?

Broker: What buying a house is going to make you.

Budget: Written proof that you can't afford the things you want.

Build sweat equity: The house is not habitable currently and unless you plan on working your hind end off to make it livable, it would be easier to bulldoze this place and live in a tent.

Cape Cod: Stylized after a 74 yr old lobster fisherman's garage.

Cash Flow: The movement your money makes as it disappears down the toilet.

Cathedral Ceiling: You will go broke trying to heat this place. It would be easier to set fire to the couch.

Charming: Small. See also, "Tiny". Snow White might fit, but five of the dwarfs would have to find their own place. See also "Cute," "Enchanting," and "Good Starter Home."

Close to all amenities: The backyard is a shopping mall parking lot.

Close to Schools: You will spend a generous portion of your morning and evening commute stuck behind buses in just about every street you attempt to take to avoid them.

Comfortable: One coat closet larger than the "Charming" home.

Commuter's Dream: Located at the bottom of an off-ramp right beside a truck stop.

Completely Remodeled: Not only does this statement give the company attorney a stroke, it also usually means new kitchen counter tops and a vanity sink in the bathroom.

Complete remodeling in 1992: Hurricane Andrew...'nuff said.

COMPLETELY UPDATED: At the advise of the listing agent, the seller has decided to remove the metallic gold shag carpeting from the living room and replaced the avocado colored stove.

Contemporary: The house is at least 15 years old.

Country living: Too far from anywhere to drive to work...or to shop...or get to an emergency room in time to prevent bleeding out from a paper cut.

Country in the city: A grotesquely overpriced large lot with a 2 bedroom house built before World War I that used to be on 100 acres that have been split off and sold to a Home Depot and a car dealership. Yes, there is a Starbucks in the parking lot.

Cozy: Not a single room could fit a full sized bed. And, the toilet doubles as a kitchen counter when you close the lid.

DARING DESIGN: It's a warehouse.

Desirable neighborhood: This "charming" house is extravagantly overpriced thanks to being located next to a neighborhood where the snobs live.

Doll-house: Tiny place filled with ugly knick-knacks.

Easy Care Yard: Acres of Red or White rock used to systematically cover actual useful space.

Easy freeway access: Located right on the noisiest arterial street closest to the freeway.

Easy to heat: See “cozy”.

Efficiently designed kitchen: The kitchen is too small to fit two people at the same time and everything you need to reach is simply done so by turning around. The down side is that in order to open the stove, you have to step into the living room.

Everything's Been Updated: Sure, they updated all the things inside the house...but the house itself has been condemned.

Executive neighborhood: Everyone's last name in this area is Jones. And yes...you are required to keep up with them.

Extra Storage: Four coat hooks nailed on the back of the front door.

Gated Community: There is a reason it is gated...Every seen 'District 9'???

Great Starter Home: House has 4 rooms. Two of which are additions.

Handyman Special: Forget It! You don't have the skill required to make this home livable.

HI-TECH/CONTEMPORARY: Lots of steel shelving with little holes. You know...the kind your dad used to store tools on in the basement. There is also a lot of glass in places most people wouldn't put it.

Wont last long!: This home hasnt sold in 374 days after two price reductions and the sellers have finally given up hope on making any money on this sale so they dropped the price another $20K.

Immaculate: Remove your shoes. Chances are the carpet is white along with the walls, furniture, cabinets, appliances, and the family pet.

In-city living: The house comes with a deadbolt lock on all windows, a bar across the door capable of stopping a battering ram...and a moat. Being outside in this neighborhood after dark will probably require an armed escort.

Institutional Investor: A active housing investor from 2006 who is now locked up in a mental institute.

Just available: The previous owner just died on the premises. That is the only way anyone would want to sell a home in this market unless they are trying to save a foreclosure. Hope you don’t believe in ghosts.

Large family room: The basement can hold a couch and a chair...which is more than can be said for the living room. Just try to keep the kids from eating the exposed insulation.

Lots of storage space: The basement is too small to be called a family room.

Low maintenance lot: No yard. The kids will have to play in the street. Or, maybe in the shopping mall parking lot.

Luxury Living: It has a Jacuzzi tub. It's leaning against the wall of the garage. But, at least it has one.

Market Correction: The day after you buy a house.

MUCH POTENTIAL: Steer clear unless you have a lot of money and actually believe your blind dates really did have nice personalities. See "Ready to Rehab," and "Fixer Upper."

Must see inside: Yeah...that's cause the outside is ugly.

MUST SEE TO BELIEVE: An absolutely accurate statement. It is hard to drive that kind of pain home through the eye without actually using a sharp instrument and a forceful thrust.

Market Correction: The term your broker/agent uses for a market crash while telling you that your house is worth 37% of what you paid for it.

Meticulously maintained in the original condition: The avocado-colored appliances are 50 years old. Minimum.

Modern: It doesn't have a dirt floor and it is insulated with something other than beaver pelts and flour sacks.

Motivated sellers: Subtract 15% from the asking price and see if they counter.

Natural setting: Forget about planting anything because the deer will eat everything in your yard but the sagebrush and knapweed.

Near transportation: an Amtrak train goes through the backyard roughly every 15 minutes, day and night.

Neighborhood Watch: Your next door neighbor has binoculars trained on your house. Your movements are tracked and reported to the police any time you have company.

Newly remodeled kitchen: The 50-year old cabinetry and faucets have been replaced with cheap modern equivalents.

Nice Condition: Apparently "nice" means different things to different people. See also: "Lipstick on a pig".

Nighttime Security: The street lights located on all corners of the home completely eliminate darkness 24 hours a day. Sleep is impossible.

No need to preview: Yeah, because if you did, you wouldn't show it!

Old charmer: Herbert from Family Guy lives next door.

ONE-OF-A-KIND: Ugly as sin. The neighbors hope the place burns down so their property value goes up.

Park-like setting: There is a tree located somewhere on this block.

Partial mountain view: You can see the tip of (insert name of local mountain) if you climb the roof and stand on a chair.

Pet friendly neighborhood: Various forms of organic matter are constantly deposited in your front lawn despite the fact that you don't own any pets.

Plenty of Parking: The stadium across the street has ACRES of parking spaces available.

Practicing Water Conservation: Yeah, the lawn is died. No one watered it. Ever. (Thank you Steve and Heather Ostrom!)

Prestigious: Expensive. Probably not worth it, either.

Prime Location: We have already had better offers from more qualified people than you...don't ask.

Quaint: Buy a wall paper steamer so you can get that crap off the wall without having to gut the entire place.

Ready to move in: The interior has been painted with one coat of cheap paint and the shag carpeting has been raked and shampooed.

Ready to remodel: This place is about to collapse; you will have to invest twice the asking price in remodel before you can move in. Seen the movie "The Money Pit"??

Recreation room with wet bar: Basement has been sheet-rocked, painted and has a faucet.

Reduced To Move: See also: "Walmart Rollback"

Rent With Option to Buy: We know you wont be able to qualify for crap...But, if you can make steady payments, it works for us.

Safe Neighborhood: Regardless of your attempts at privacy, your neighbors will continue to attempt to peer through the slits in your Venetian blinds. See also: "Neighborhood Watch"

Seasonal creek: There is a 4 foot wide, 6 inch deep muddy ditch that runs across the property...And it only fills up after a good rain or during spring thaw.

Secluded setting: The only thing further away from civilization is a polar ice cap. Grizzly Adams once lived here.

Show and Sell: In other words, the listing agent will be doing no marketing and the stubborn seller doesn't want it staged.

Shows Well: The seller actually cleans the place up before you bring your buyers over.

Sophisticated: Plain. White walls with zebra print rug and furnishings. A large piece of abstract art is in the dining room and a canvas the size of a Chevy hangs on the wall covered in what appears to be pantyhose, tin foil, and computer diskettes.

Spacious: We knocked out a wall and expanded the living room into the garage.

Sprawling ranch: Inefficient floor plan that appears to have been designed by a drunk monkey.

Storybook: This house is old and the roof is not flat. See also: "Little House On The Prairie"

Stunning house: The house is not ugly...the interior, on the other hand...

Sunny corner lot: There are no trees anywhere near this property located on the corner of the two busiest streets in town.

Sunken Tub: The tub isn't sunken...it fell through the floor. The remaining structure is only capable of holding water or a body. Not both.

Territorial view: Great view of your neighbor’s bedroom window and "private" hot tub with the glass roof. If you lean hard against the glass and look hard to the left, you can see a broken down Pontiac in the alley.

Three season sun room: Putting screen up around your front porch does not make it a "sun room".

TLC: Tear down, Level and Condemn!! (This after a Realtor told me her country property needed just a little TLC...Upon visiting, I promptly fell through the front porch up to my knees!)

Townhouse: A 3 story walk-up on the north side that is sandwiched between two others that look exactly the same. Not only can you hear your neighbors fight, but you hear when they play music, watch TV, use the bathroom, or blink.

Tudor: A quaint two bedroom where both bedrooms are now in the attic which is not insulated.

UNIQUE CITY HOME: Used to be a warehouse.

UPPER BRACKET: No, this doesn't include you. See also: "Executive Neighborhood" and "Prestigious"

Usable land: Vacant lot. Probably filled with broken glass, nails, large rocks, bicycle parts, and Jimmy Hoffa.

Victorian Sweetheart: Once you steam off the wallpaper, you will need to strip off 14 layers of lead-based paint.

Walking distance to (insert noun here): There is nowhere to park your car within 20 minutes of this house.

Well Below Market: We keep having to reduce the price on this shanty because nobody wants it.

Will Help Finance: Soooo....the owners know they're asking too much. And, taking that into consideration, they are more than willing to "help" you get into this house that you can not qualify on your own.

YOU'LL LOVE IT: No. No, you wont.

 

Feel free to add your own in the comments!!! Id love to see them!!

 

Follow Clint on Twitter and make sure you go to the RECR fanpage and become a fan!! If you have any questions about RECR, please call Clint at 800-977-7058.

 

    

     I wish I could tell you that I am surprised at some of the issues being brought up during the processing of my clients' mortgages these days ... but the element of real surprise is long gone.  It's now become "what will they think up next?"  I certainly gain an education on many topics ... and it's never dull in my lending world.    

     All sorts of credit issues, employment, liens, personal histories, financial accounts, retirement accounts, and more ... for both buyer, seller, and even those providing buyers a monetary "gift" ... are coming under scrutiny.  Detailed explanations are being demanded for everything.  You don't comply, you don't close.

     Now, it seems, there is to be one more issue to face ... and many lenders will likely be confronting it increasingly often and asked for clarification of circumstances during future processing.

     That's the growing number of rigid and aggressive stands Homeowner Associations in many states are taking on overdue HOA fees.  Liens and Foreclosures are resulting from these actions! 

    

     This point was driven home to me when reading a recent article on www.npr.com, the National Public Radio website.  This article told of an Army National Guard commander that served our country in Iraq just last year. 

     While in Iraq on mission, his wife called him in an almost hysterical state.  The Homeowners Association that represented their subdivision in Texas had foreclosed on their $300,000+ completely paid for home.  His wife had missed making only two payments.  Someone had taken advantage of their delinquency and purchased the home through the court system for just $3,500 ... the amount outstanding on HOA dues and the Association's legal costs.

    

     There are 33 states across our country that have ruled that Homeowner Associations need not even go before a judge in order to collect on liens they have placed on properties.  In many of these states, foreclosure is also allowed on these liens ... Texas being one of those states.  This is called nonjudicial foreclosure.  (Additional information regarding Foreclosure Procedures by State). 

     In most instances, dues may not make up the majority of the dollars owed in a lien ... as legal costs are paid by the homeowner as well.  As the economy has grown worse, HOA's have become increasingly more forceful in their pursuit of delinquent association fees.  In Texas alone, what WAS the cause of only 1% of foreclosures, has now grown to 10%+ presently.

    

     This is information that everyone in the real estate industry should be aware of.  The chances of this popping up during processing of a home will be rising in many areas, whether the sale is involving individual homeowners or lenders. 

     Homeowners, (depending on the laws of their states), entering into purchase transactions that involve HOA rules and fees MUST be educated and alerted to the importance of making timely payments ... and the ramifications they will face if they do not do so.  There could be extreme consequences.

     There is some good news regarding the commander and his family from Texas.  In 2003, Congress passed the Servicemembers Civil Relief Act.  This Act is meant to protect service personnel and to prevent nonjudicial foreclosures against those actively fighting overseas.

     The commander and his family hope that a judge rules that the Homeowners Association acted illegally, and that the sales transaction will be nulled, and their home will be returned to them.  The case is currently slated for court at the beginning of the coming year.  

                            

www.genemundt.com

gene@chicagobancorp.com

More and more I am getting calls from distraught homeowners bewildered by their lender’s behavior.

Here’s the typical cycle:

• Borrower submits request for loan modification.
• Lender puts the borrower on reduced trial payment.
• The reduced trial payment is hundreds of dollars less than the regular payment.
• 6 to 12 months later the lender denies the loan modification.
• Lender notifies the borrower that there are thousands of dollars of accrued interest owed; the difference between the months and months of regular payments and the trial payments.

So, not only is the loan mod denied, but now they are in serious arrears. Sometimes the resumed monthly payment is higher than the original regular payment!

A live example:

• Original regular payment: $1,247.00
• Trial payment: $847.00
• New payment after loan mod denial: $1,432.00
• New arrearage about $6,000.00

Sellers are asking;

• Why did it take a year?
• I could have moved on with my life. Why did the lender give me false hope for a year?

I don’t have good answers for them, except to welcome them to the world of dealing with banks and foreclosure workouts.

At this point, the sellers are so angry and exhausted from the process that they’re willing to walk away. However, in most cases the next best step is a short sale.

If a professional Realtor who specializes in short sales is involved, the lender lets the house sell for market value, even if it generates an amount short of what is owed. If done properly, the lender will forgive the deficiency balance forever.

Dave Halpern

Broker, Louisville Short Sale Expert

(502) 664-7827

Need a short sale? Click here for help

 

 

I want to start this post by saying that, as with all demographics, not all Generation Y home buyers are going to want the following list in a home.  But, the trends with this age group seems to be leaning in the  direction  for certain amenities and features when buying or renting a home.

I also will just add that as Generation Y begins to marry and have children, a few of these desires may change, but we still have 5-10 years to get to that point.  Generation Y is marrying later in life, so for now, this list will be helpful when selling a home.  If any of these are evident in the property you are selling, make sure to point them out.

So, here we go:

1. Efficiency in space.

2. Utility:  Gen Ys want to know that each room has a useful purpose.  If you are selling a house that has a "parlor", show it as an office or a technology room.

3. Simplicity in design:  Gen Ys have been overloaded with junk and informaton…so keep it simple.

4. Multi-pupose rooms.  Gen Ys don’t really care that much about a formal living room or dining room.  They are much more interested in open spaces, multi-purpose rooms and large kitchens (even though they eat out a great deal).  I recently visited a friend that had creatively designed 700 square feet so that it was open and felt much bigger than actual.  A murphy bed was used and could then double as a bar for entertaining.

5. Housing that is within walking distance of grocery stores, shopping, dining, night life and gyms.  The ability to “stroll” is critical to this generation.  Gen Ys want to be able to park their cars and walk from location to location.

6. Energy efficiency (point out any appliances that are energy efficient or any areas or structures which are LEEDS certified).

7. Easy access to neighbors their own age and to a diversity of people from all walks of life and all ages.  They want to be surrounded with their own peers, but Gen Ys also want a thriving, buzzing network of interesting people.  Gen Ys crave diversity, so the more interesting the people in the neighborhood, the better your chances will be of selling.

8. "Bite-Sized Spaces".  Gen Ys think in bites…not huge, sprawling spaces.  Don’t assume they want a great deal of “space”.  Many Gen Ys say that they can be happy in a smaller home or condo that is efficient, has some space in the back for entertaining and that is accessible to the lifestyle they want to live.

9. Access to hiking, biking and running trails.

10. Yard space for outdoor activities and outdoor entertaining.

11. Neighborhoods which are “dog and cat friendly”.  Gen Ys are big on animals, so make sure to ask if they own a pet.  Many will bring their pet with them to see the home.

12. Technology that is advanced and current.  If you are selling property in an area with free wireless, make sure to drive that point home.

13. Wide but not deep…Gen Y’s don’t care much about depth in a house…they want width and a bigger back yard or outdoor dining space.  Again...just ditch the cut up rooms with formal living and dining rooms in the front of the home that only have one purpose.  Look to sell homes that are close to being one big open room and one additional office space (and of course a nice bedroom).

14. Low maintenance (Gen Y’s travel a great deal, so they don’t want a great deal of upkeep).

15. Modular homes are pretty popular as well as duplex living to keep the cost lower.

16. Any homes which have recycled materials (recycled countertops, cabinets, doors, etc).

17. Homes which may have an area with its own private entrance for guests or for the purpose of subletting. 

I just can't get a day of rest! One of my clients had a rotten experieince this week with a home inspector.

REDC, the California company that does default solutions and auctions for lenders, has gotten a nice niche for doing home inspections for lenders just prior to the lender accepting and filing a deed in lieu of foreclosure.  They hire local inspectors and contractors to review the interior and exterior of the home and make necessary remedial actions if necessary.  The problem is that some of these inspectors are criminally fraudulent - and they are not only ripping off the distressed homeowner, but the banks too.

For example (dates and names have been altered for anonymity) - Renee, a client of ours agreed to a deed in lieu proposal from Bank of America on her $300,000 plus immaculate home in Palm Beach County, Florida.  The lender encouraged her not to do a short sale and instead to do a cash for keys deed in lieu which would have put over $6,000 in her pocket for moving out.

The DIL requirement was for her to sign the documents and be out by June 15th, and she did so and was out before then and continued to pay the HOA, electric, run the A/C and pay the gardener.  The inside was left "as new" clean.

The REDC inspector then came out the second week of July and found and charged for smoke detectors (the house has an alarm system with all required smoke detectors), hazardous material handling and disposal (they threw out the purposely left small cans of paint for touch up), dehumidifiers (the a/c was left on 80 degrees and all a/c central units were working perfectly), and outside trash removal from the gardens (the house is impeccably maintained outside by a weekly gardener).  All this cost the homeowner through a direct reduction of the "cash for keys" payment, with no room for dispute or argument with REDC or the lender - "take it or leave it"!

These "PRESERVATION COMPANIES" have it sweet - often they deal with abandoned or walk away homes or borrowers that just don't care anymore.  Lenders are relying on the outsourcing company and don't have a check and balance system for their billings.  One Preservation Company contractor told one of our clients, "Without my even telling him what was on the bill, he told me they automatically add bogus charges such as dehumidifiers, smoke alarms, strapping down outside air conditioners, and charges for removal of documents (such as the appliance manuals and condo documents left in a kitchen drawer for the new owner). He told me unbelievable stories of being paid to add a smoke detector to a room that already had 5 on the ceiling."

Since these are (and in this case was) a lender federally insured by the US government, the conduct by the contractor inspector and condoned by REDC is outright fraud on you and me!  Such conduct is probably also bank fraud, but I will let the experts decide about that issue.

BE CAREFUL WITH HOME INSPECTORS SENT BY LENDERS!!!!  They probably are not on the side of the homeowner and they being human are only trying to make a buck ... or three.

Copyright 2010 Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 begin_of_the_skype_highlighting   email: RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com  New Website www.Florida-Counsel.com. 

See our easy to understand articles at:

TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES

 

I tell my neighbors.  I tell my clients.  I tell everybody who will listen.  NEVER pressure wash a deck!  When the pressure-wash companies send their college kids to knock on my door to "wash" my deck, I tell them why they should not be doing that to decks!  When I see their trucks*, they advertise cleaning decks, patios, siding, roofs - you name it!  Don't do it!

The older the deck, the worse the wood reacts to pressure washing.  The big mistake is that companies and homeowners have a tendency to set the pressure way too high.  But even at low pressures the deck can become damaged.

What does pressure washing do?

• It removes loose material and leaves a gafillion dangerous splinters and gaps.  Those gaps open up further letting in more damaging sun and water.
  
• It removes the natural oils in the wood that are not replaced with sealants.
• It causes wood to dry quickly causing cupping and warping.
• It causes damage.
• It loosens nails as the wood expands.
• It can cause water to enter the house.

So what to do instead?

There are various, excellent, gentle cleansers out there.  Be sure to select cleansers that do not have caustic lye or acid, or say not to use around children, pets or water features.  A company called Dekswood makes an excellent cleanser that can be followed with sealants.  And the so-called "oxygen" cleansers, with the active ingredient of sodium percarbonate, are great and don't damage the wood, the kids or pets, the house or the yard.

You MUST seal your deck after cleaning.  The sun does more damage to your deck than rain and snow.  BE SURE TO USE A SEALANT THAT HAS UV INHIBITORS IN ADDITION TO WATER PROTECTION.  Read the label.  It will tell you what the contents are.  Water proofing alone is not enough.

My recommendation:  Keep your deck gently cleaned and protected and it will last many decades.  Not doing so makes it unsafe and age much faster.

* I once gave my spiel to a guy sitting in his company truck in a parking lot (with a smile on my face) and he told me he would NEVER pressure-wash his deck.  He said he sees what damage it can do later!

I was asked a question about the VA program called Vendee Financing and wanted to address the issue in a blog post or two. From the comments section:

“Are you familiar with the Vendee Program bank of America offers to buyers? It is a VA program offered on a listing I was showing a buyer and I am curious a person in your specialty has opinions on it.”

Vendee financing is a program the VA offers to help finance VA REO properties. The appeal of this is that it’s one of the rare times when a VA loan product or program is available to non-veterans.

According to the Department of Veterans Affairs, there are two terms available—a 15-year and 30 year fixed rate loan, with terms that include 0% down if the property is an owner occupied purchase. The loan can be increased to include closing costs, but the funding fee may NOT be financed.

For non-owner occupied purchases, at least 5% down is required and the VA states “Investors may use 75% of anticipated rent based on appraiser's estimate to offset against the subject property monthly payment.”

Regardless of whether the purchase is classified as an owner occupied or not, this type of home loan is not what the VA calls a “credit score driven product” but for non-owner occupied purchases, the Department of Veterans Affairs stipulates investors must prove they have experience in property management in order to include estimated rent amounts as income in the financing paperwork.

For qualified investors, a big part of vendee financing’s appeal is the fact that there are no limits on the number of properties you can buy under the program—if there’s a list of properties available under vendee financing, you can apply to buy as many as you’re able to invest in.

Again, this program applies to properties in the VA’s inventory of foreclosed homes only. The details sound great to many, but there are a few caveats to be aware of which I will include in my next blog post.

Original Source: Buy A Fixer Upper Or Move In Ready Home?

Buying a home can be tricky business. Some homes are move in ready, others need some TLC. When looking at homes, which one is going to be the best value? Is it better to just buy a home that is move in ready? Or is there still value in buying a fixer and doing a little work?

Deciding On A Fixer Upper Or Move In Ready Home

When deciding on a fixer upper, you need to know what needs fixing.  Are the problems with the property structural? Bad wiring, bad foundation, plumbing, termites etc. Or are the problems more cosmetic such as outdated fixtures, paint, popcorn ceilings etc.

Knowing what needs fixing is half the battle. You should take a trusted contractor to the home before submitting an offer. If you are an experienced rehabber, you may not need a contractor, but I would still recommend an inspection.

Get a bid from the contractor and add about 10%. Most the time, projects go over budget, so be prepared for that.  If you plan on doing the work yourself, be sure you know exactly what you’re doing. A rehab project gone wrong can seriously affect your pocket book.

How Mush Are Repairs Going To Cost?

The other half of the battle is the money. How much is this rehab project going to cost? What value are you going to add? And how long are you planning on staying in the home? There is a great program called an FHA 203k loan. With this loan, you can finance more then the home is worth for repairs.  You can get up to an additional 35k on top of your loan.

Also, have you’re Realtor run some numbers. If you bought a comparable home that didn’t need the repairs, what would it be worth? What is the price of a move in ready home compared to the costs of the repairs plus the home that needs the repairs? Does it make financial sense to repair the home? A lot of times buying a home and fixing it up can add instant value. Just be sure you know all the numbers.

Check Out The Neighborhood

Buying a fixer upper and doing repairs may not matter if the neighborhood is in a decline. Is this home the only fixer on the street? Or is there a lot of problems with other homes in the neighborhood?

There is a lot more risk pouring money into a home if the neighborhood is in bad shape.

Your return will be less if the neighbors aren’t doing their part maintain the neighborhood. One thing I would recommend is to check out the county records. 

Are home owners in the neighborhood doing okay withe their mortgages? Are there forclosures looming? Watch out for neighborhoods with  declining home values.

Cosmetic Repairs And Doing The Work Yourself

Almost every home you’re going to look at needs some sort of work in your eyes. As a buyer, you won’t find everything you want in a home, and most buyers realize they will be doing some sort of cosmetic work after purchasing any home.   Buying a home that needs cosmetic updating can be a great way to get what you want and bring a nice return on your investment.

If you’re okay with living in an “ugly” home for a couple years as you go from project to project, the cosmetic fixer upper is a great choice. Doing cosmetic projects yourself, such as updating the bathrooms and kitchen, can save you money over buying an updated move-in ready home.  Ask your agent what type of updates will produce the best return, and decide if you’re capable of doing the work.

Buying a home, whether move in ready or a fixer upper, is all about what’s going to work for you. If you’re the type of person that can handle a DIY project, go for the fixer upper, you can save some money. If you’re not the fixer upper type, hiring contractors to do the work can end up more expensive then you planned.  If you do your homework, you should be confident with your decision.

 

Lisa Udy

Platinum Real Estate Group

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