Prep your home to sell in fall

I don’t know about the rest of you, but I can’t believe how fast this summer has gone by.  In two days, it’s going to be September.  It seems like it was just yesterday that school was ending for the summer.  Maybe it was the consecutive high temperatures we’ve had in Chicago, but this summer flew by.  So for those of you who will be putting your homes on the market for the fall or for those of you who have your homes listed but want a better chance of it selling now, here are a few tips to get your home sold this fall.

1.  I can’t stress the importance of curb appeal.  I’ve said it before and I’ll say it again.  I’ve had buyers decide not to look at the interior of a house because the exterior was so neglected.  Your home could look like the Taj Mahal inside, but if the outside isn’t taken care of, it probably won’t matter.  So make sure leaves are raked and clear of the driveway and walkways.   Keep the lawn mowed.  Nothing is more unappealing than a front lawn that looks like the rainforest.  Trust me; I’ve seen it.  Keep gutters free of debris so that they drain properly.  If you get snow early, make sure to shovel any area that a potential buyer will walk on.  Again, I’ve had people not able to reach the front door because of 12″ of snow blocking the path.  If your home is vacant, make sure to go back to take care of these items or hire a service to handle it for you.

2. Keep windows clean.  Nothing brightens up a room more than a sunny day.  When the sun is shining through those windows, it’s pretty obvious if they’re covered in grime or dust.  The house will look bigger and brighter if you open up curtains/blinds to let the sun shine through clean windows.

3. If you have rooms that are painted dark colors, considering lightening them up with something neutral, or even a light yellow color.  It will make the room feel larger, brighter, and even cooler, especially as it gets dark earlier.  Buyers will be able to get a better sense of what the room looks like if they come to view your home in the late afternoon/early evening.

More great tips can be found here.  If you’re ready to get your home on the market, I’d love to help you prep it for fall.  Please visit me online.

A dictionary of real estate terms

Since I’ve been blogging now for a couple of years, I realize that I tend to just throw real estate terms around.  I was thinking that there’s probably readers out there who aren’t sure what specific terms mean.  I’ve done blogs regarding the differences between foreclosures and short sales, to give a better definition of those.   But I wanted to cover some more common terms you might hear if you’re in the market to sell or buy.  You might even hear these terms from a Realtor doing a listing presentation and are unsure of the meaning.  This will help you become more educated about the process.

The first term you might hear if you call an agent to list your house is a CMA. You might also hear about a BPO.  What do these acronyms mean?  CMA is a comparative market analysis.  This is just the formal name for going over recent sales and statistics of other homes in a similar geographical area with similar features of yours, to determine the best price to either list your home or to come in with an offer if you’re buying.  A BPO is a broker price opinion and usually is done by a Realtor giving information to a bank who owns a home as to what the home should sell for.

Earnest money is money you put down as a deposit when you’re writing an offer for property.  You will offer a specified amount for the brokerage to hold in a special account.  If something falls through with the contract, it’s likely you’ll receive this amount back.  If all goes well, this money gets applied toward the purchase price at closing.  Think of it as being similar to a security deposit on a lease.

If you’re writing an offer on a home, you’ve probably seen the term contingency.  This can apply to a mortgage or attorney review or home inspection.  It’s generally a condition that must be met before the contract is final.  So you’ll put in the contract that the contract is contingent upon you receiving a home inspection by a certain date.

Escrow can mean a couple of different things.  The first is in reference to your mortgage.  Sometimes you’ll give the mortgage holder money to pay your real estate taxes and homeowners insurance for you.  This is to prevent you having to pay a large amount of money each time these bills are due.  You pay extra each month toward your mortgage and the mortgage holder writes the check to the insurance company and the county.  That means you’re escrowing your payments.  Escrow is also used to mean that a third party oversees the transfer of the property and handles the paperwork.  You may hear the phrase “Closing in escrow.”  This is a lot more common in the western half of the United States.  Not all parties have to be in attendance during escrow.  When you close (typically common in the eastern half of the U.S.), it’s a lot more common that all the agents show up, the sellers and buyers, and attorneys.

What exactly is title?  It’s basically ownership of the property.  If title is clear, there are no liens that prevent you from transferring ownership from the seller to the buyer.  If there is a cloud on the title, it means that there is a lien against the home that needs to be cleared up.

If you have heard any more terms you’re unfamiliar with, I’d love to help you out.  Please leave me a comment or visit me online.

Keeping closing costs low

With mortgage rates ridiculously low these days, what better time than to refinance or purchase a new home?  This past week, the 30-year fixed rate was at 4.44%, the lowest it’s been since Freddie Mac tracked the rates starting in 1971.  Even last week’s rate, 4.49%, is extremely low.  For the 15-year fixed rate, it was 3.92%, the lowest since Freddie Mac started tracking it in 1991.  So first things first – pick up the phone and call your mortgage lender now to talk about a possible refinance or purchase.

So if you are planning to refinance or purchase, you still have to worry about closing costs.  Here’s some tips on saving money during this process.

1. If you’re planning to refinance, contact your current mortgage lender/broker.  They already have your information so they won’t need to charge you again for an application fee or an appraisal fee (if it’s relatively recent.)  If you’ve refinanced recently, you also might be able to save on the fees for a title search.  Ask your lender about a reissue rate, which they can request for you.

2. Everything’s negotiable.  If you’re purchasing from a homeowner or builder, consider asking for money towards your closing costs in the price of the house.  You might be able to add $1,000 or $2,000 towards the purchase price and have them pay up to $5,000 of closing costs on your behalf. 

Fee-ed Up?
Here are just some of the costs of closing on a mortgage.

Fee  Average cost* 
Application  $272 
Appraisal  $310 
Credit report  $28 
Document preparation  $206 
Processing  $288 
Recording  $86 
Underwriting  $236 

 *Based on a $100,000 loan. Not every lender surveyed charges all of these fees.
 Source:  HSH Associates December 2003 survey of lenders

3. See if you can save money by providing your own reports.  For example, many lenders might charge you $30 for a credit report and $25 to FedEx documents.  While those numbers seem small, they add up quickly.  See if they’ll accept a credit report you provide that you’ve gotten free or allow the lender to pick up the documents to save on the cost of shipping.

4. Ask to review the HUD at least 24 hours prior to closing.  Your attorney can also do this for you.  Compare it to what you were quoted initially in your good faith estimate, and point out any differences to your lender.  Make sure everything is added up correctly (a mistake a little too common) and that you’re not charged twice for the same thing.  I’ve also had mistakes made where taxes were calculated wrong in the seller’s favor, rather than the buyer’s. 

5. Make sure you purchase homeowner’s insurance ahead of time.  Closing agents will need to see proof of insurance at the closing table.  If not, you might be forced to purchase the lender’s policy at a rate way over the typical charge.  Ask your lender and your Realtor for a list of essential items to take care of before closing so you don’t get stuck paying extra for something or for anything you don’t need.

If you have any more questions, please visit me online.

How to find cheap home improvement supplies

So you’ve decided to take on a home improvement project.  Your kitchen cabinets are from the ’70s and need an upgrade.  Your dishwasher stopped working.  Your carpeting is maroon and covered with paint.  Whatever the reason, I’m sure you’ll appreciate some tips and ways you can fund your home improvement project without spending a fortune. 

1. Scour garage sales and Craigslist.  Some people post items they are getting rid of for free on Craigslist.  Sometimes they’ll have appliances that just need a tweak or two to get back running or they bought a new one and no longer need the old one.  You can find great deals on secondhand products.  You can find items under household, appliances, or materials.  With a quick glance this morning, I found wooden fence, bricks, and a hot tub for free!  They just usually request that you’re able to pick up and haul the items yourself.

2. Search for a Habitat for Humanity Restore. This one is in Gurnee, IL.  Individuals and contractors can donate used or new building materials which you can purchase at a great discount.  They generally carry appliances, doors and windows, flooring, plumbing materials, cabinets, and more.  This location sells new and used toilets starting at $25 each and 6-panel interior bifold doors for $10/pair!  You can find the closest store near you here.

3. If you’re ordering carpet and flooring, check the clearance area for their discontinued products.  You might also find carpet that someone ordered and was dyed the wrong color and the buyer no longer wants it.  As long as there’s enough on the floor for the space you need, you can get it at a deep discount.  The store generally wants to get rid of what they have to make room for new products.

4. If you’re shopping at a home improvement store, head to the back near the loading docks.  Stores usually have a section for building supplies that were slightly damaged during transport or custom orders that ended up being cancelled.  It’s worth looking through because you’ll be able to purchase these at a discount, too.  And if you see something that’s going to be discontinued, be sure to ask a sales associate if they’re willing to negotiate on the price.  Since stores want these products gone to make room for new ones, there’s a chance you’ll save some cash here, too.

Do you have other tips on how to find discounts on these supplies?  I’d love to hear them.  Please leave a comment or visit me online.

Keep your HOA bills current

I know it’s just another thing to worry about.  You’re struggling in this economy to keep up with your mortgage payments.  Now you’re having a hard time paying your homeowners association dues.  You may be surprised to find out that your HOA can foreclose on your home if your dues aren’t current.

HOAs have the ability to move a lot faster than lenders when it comes to foreclosures.  As I mentioned a few blogs back, it can take a lender (especially in IL) months to start the foreclosure process and can be more than a year before it starts until eviction.  Well, HOAs don’t have to deal with all that paperwork.  They can come in, take title, and remove the borrower from the home.  And they can take title for the cost of those delayed dues and attorneys’ fees, a very small amount.

Many borrowers believe they’d rather sacrifice HOA dues to throw extra money into their mortgage payment.  Be very careful.  Make sure to read the declarations and bylaws provided by the association so you know all the rules.  By you not paying your dues, the HOA doesn’t have the money they need to pay the vendors responsible for your lawn care, snow removal, garbage removal, etc., and then they can’t cover their bills.  So it’s an endless cycle.  Find out if your state is one of the 34 that allow HOAs to foreclosure on homes by judicial foreclosure.  Florida, for example, can do it in 10 days.  Texas allows for 180 days for the borrower to become current.

And if the HOA is having trouble paying their bills, it might be hard for new buyers to obtain mortgages for that community.  The banks want to make sure the HOA isn’t having any financial trouble before they approve a loan for a new buyer.

More information can be found here. And I can be reached online.  But this is just a friendly reminder to you to be careful in choosing what bills to pay and what bills to not pay if you’re struggling.  It’s best to contact a HUD-approved counselor for help.