Must-notice inspection items

So you found the house of your dreams.  You’re ready to make an offer or you’ve made an offer and now have the home inspection.  Have you seen the movie The Money Pit with Tom Hanks and Shelley Long?  It’s about a couple who get a great deal on a huge house (or so it seems) but the second they move in, everything starts falling apart?  Here are some tips to avoid that happening.  And while you definitely should have a home inspection done, these are items you want to make sure you check out prior to going through with a sale because it can save you a lot of money in the long run.

1. Check out the basement, if the home has one.  If it does, there’s a good chance that your furnace, water heater, and air conditioner are all down there.  You want to get an idea of the age of those systems as well as how well they’ve been maintained.  They’re all expensive items to fix.  The furnace and air conditioner should get routine maintenance checks at least yearly.  If there is a problem, you can always request that the seller fix it, but it’s important for the future to know yourself.  The basement will also help you determine the type of construction and materials used in the construction of the home.

2. Look at the foundation.  Tyson Kunz, a contractor and owner of TTK Home in Tomball, Texas, says you need to look at the size of the trees near the home and how close they are to the home.  Over time, the roots of those trees can cause the foundation to crack and break.  Also look for cracks or gaps in any hard-surface floors to tell you how structurally sound the foundation is.  If there’s only carpet throughout, you can look for cracks in the drywall to give you an idea.

3. Look for water damage.  The first place to start is obviously in bathrooms.  Make sure that exhaust fans in bathrooms bring the moisture outside.  I had a couple once who did their home inspection to find out the fan was venting it directly into the attic, which can cause major mold problems later on.  Check that all caulking is secure and there aren’t any leaky faucets.

4. Plan a bad-weather visit. MSN Real Estate also recommends going back to view the home on a non-sunny day.  You’ll be able to see if water is seeping into the home anywhere, how well the windows seal out cold and water, and that all the systems are working properly.  So even shopping for a new home in bad weather can be a good indicator of how well the home stands up to the elements.

If you have more questions, please be sure to visit me online.

Reasons your property taxes can go up

It’s obvious that the value of your home helps determine the amount of your property taxes each year.  Home values go down, there’s a good chance your taxes might, too.  However, the value of your home is only one part of what makes up the amount of your taxes.  The other is the tax rate for your specific town or county.  So even though home values are dropping, it’s possible your taxes might still go up.  CNBC wrote a great article about some reasons why:

1. Budget cuts.  Since part of your property taxes go to help fund your local schools, library, fire department, etc., if the government cuts funding in those areas, it usually means more money is needed from the homeowners.  This is one of the biggest reasons taxes can increase during an economic downturn.

2. Increases in public employee benefits.  With wages, pensions, and benefits for health care increasing among public employees, states are usually strapped for money to cover these costs that unions can require.  You may be surprised to know that your property taxes might have to front the bill.

3. Renovations to your home.  Let’s say you do a major kitchen renovation or add a bathroom.  This can be a great selling point down the road.  But since it’s most likely to increase the value of your home, it’s very probable your taxes will increase, as well.  Tax assessors often determine when renovations are done by the permits a homeowners has taken out to cover any electrical work, plumbing, or major construction.  You might think you can sneak around the system and not take out any permits.  I do not recommend this at all.  I’ve had several deals fall through when that sellers goes to sell the house and the buyer realizes that proper permits weren’t taken out at the time of construction.  It ended up costing the seller a lot of time and money and they had to relist their home after that.  It’s not worth the hassle.

4. Location.  Where in an area you live can determine if your taxes will rise.  If your neighborhood fronts a lake or you live within walking distance to a downtown, it’s likely your taxes will be higher.  So it’s important to know that it might be great that your town is thinking of adding in a golf course (for example), but it might make your taxes rise.  That’s important to know when the town does a public hearing to find out what the residents think.

Taxes are definitely appealable.  Make sure you know the deadlines and timelines to get the appeals turned in in your local area.  You’ll often be asked for comparable properties.  Your Realtor can help you with this.  For more information, please visit me online.

Which debt to pay off first?

For all of you struggling with bills, it can be very overwhelming if you’re short on cash to know which debt you should pay off first.  Do you pay your car payment? your mortgage? your credit card bill?  One of the leading finance experts in the country, Suze Orman, prioritizes the order in which you should pay down debt if money is tight.  The video of her Debt Loyalty List can be found here.

1. Any debt owed to the IRS.  If you have tax payments due or past due, it’s best to pay them first.  A lot of you may not agree with this.  However, the IRS has legal authority to seize your accounts and possessions at any time.  While a bank would take time to legally go through the proceedings to foreclose on your house, the IRS can take what they want when they want.  Be done with them first.

2. Student loan debt.  The reason this is so high up on the list is because this debt can can not disappear in a bankruptcy filing.  Even if you ask for a delay, the interest will continue to add up.  And unpaid student loans can take money out of your wages if you’re behind.

3. Personal debt.  Suze recommends that any debt owed to friends or family be paid off next.  While this debt might not come with an interest rate, she says that most people who loan you money do so because they trust you to pay it back.  It can negatively affect a relationship.  And Suze’s motto is “People, then money, then things.”

4. Mortgage debt.  So this does come up higher on the list than a credit card.  While it can take time for the bank to literally have you removed from your home, once you miss that first payment, the process starts.  You can always try to refinance your home or apply for a loan modification.   Be aware that if you apply for a loan modification and you’re under a temporary modification where you’re paying less each month, the bank can require all that money you saved be paid back if your modification isn’t approved.

5. Car loan debt.  Suze has this one above credit cards because most people still need transportation to get to their job to continue to make more money.  If you don’t have a car to work, you’re in bigger trouble than not paying a credit card.

6. Credit card debt.  Since credit card debt is unsecured (meaning that if you don’t pay it, they can’t come in and seize your home, your car, etc.), it’s best to pay this one last.  So by no means does it make sense to take a loan out of your 401K or against your IRA to pay this down.  That money is protected from bankruptcy if it comes to that.  Also, be aware that you can contact your credit card companies to try to negotiate interest rates or have them forgive debt amounts.  In terms of which credit card of many to pay off first, always go with the one with the highest interest rate.

What do you think of her order?  Do you agree or would you change it?  I’d love to hear your thoughts.  Please leave me a comment or visit me online.

Tips for buying carpet

So you’ve decided you need to carpet one room in your home (or several.)  You’re at the flooring store and you’re overwhelmed by your choices.  Do you go by the lowest price? the texture? the color?  I wanted to offer you some tips on how to choose the best carpet for your home.

1. First things first.  The padding is very important.  If you have a thin layer of padding, no matter how cushiony the actual carpet, it won’t make a difference.  Padding is what determines how the carpet will feel under your feet.  Berbers typically don’t use much padding while a saxony will use more.  And color doesn’t matter here.  It will be invisible under the wall-to-wall carpet of the room.

2. Texture.  Saxony has an ultra plush look and feel and can look gorgeous in your home.  However, it shows footprints and vacuum marks, so it works best in a room that doesn’t get a lot of traffic, like a sitting room, living room, etc.  Best to keep this one out of your family room or master bedroom.  Frieze carpeting is when you have the yarn twisted so tightly that it curls over at the end.  I refer to it as “berber shag.”  This is great for high-traffic areas.  Another style not recommended for heavy traffic is cable because it can easily get matted down since the yarn is longer.

3. Know your quality.  Higher-quality carpet will have the yarn stitched more tightly into the backing.  It will show less and last longer.  If you know you’re going to want to change styles in a few years or replace carpet with different flooring in the near future, you might not need to spend as much on higher quality.

4. Color’s important.  Once you have carpet installed in your home, it’s typically lighter than the sample you saw in the store.  You definitely want to keep that in mind when choosing your color.  Also, a lighter shade of carpet can make a room look bigger while darker colors visually bring walls closer together and make a room look smaller.  And please whatever you do, do not carpet your entire home in evergreen or cranberry carpet.  If you’re planning to sell, keep the color as neutral as possible.

More tips on buying carpet can be found here.   That site also has a great glossary explaining many of the terms you’ll see at the store. For more detailed information on different textures and costs, click here. This site goes into specifics on different types of padding.

As always,  I can be reached online. Have a great week!