It’s the American dream that has of late seen a dark cloud emerging overhead. The cloud is named “dropping home values”. It’s happening everywhere except here in the OKC Metro. My article of a few weeks ago demonstrated how property values are holding firm here in the metro while in many places throughout the U.S. home values are eroding like a sugar cube in hot coffee.
So for the few areas around the country (like our great city) where purchasing real estate is still a great idea, what are some of the more important pitfalls to avoid when taking the plunge into home ownership?
Inspect the Inspectors: Every home transaction should have an inspection performed by a licensed and professional inspector. Almost every Realtor has an inspector they like to use and they usually aren’t bashful about recommending them. It’s still your responsibility to meet the suggested inspector to determine whether or not you are comfortable with them. If not, interview several others until you find the inspector you want. Sometimes it’s best to find the inspector of your choosing, this way you might feel more comfortable that the only interests being served are yours.
How much you can afford: This surprises many first time buyers, but the people offering you the advice really don’t know what you can afford. When providing you a monthly payment amount, they are giving you the guidelines form the lenders. Only you know how much home you can afford so you can still save for the future and go on vacations. Remember, the amount of home you can afford is determined by you and your budget, not an arbitrary figure extracted from a lender’s equation.
Short Term Financing: Taking a five-year ARM (Adjustable Rate Mortgage) loan may be appealing because the rate is a bit lower and anyway, you’ll probably refinance the loan within 5 years. But be careful, your job or income situation may change between now and then and you might not be able to refinance later. Or your current health situation may not be a rosy five years from now. And don’t forget the potentiality that interest rates could rise making it impossible for you to afford the payments at the newly refinanced rate. .
Opening and/or closing credit accounts: Once financing for your new home is underway, in other words when you’ve signed the papers and the loan process has begun, don’t go out and apply for new additional credit of any sort thinking that you’re helping your credit picture. At the same time, don’t close any credit accounts during this time. Both of these activities have negative impact on your credit picture. The best advice is to wait until your financing is complete, in other words, until after closing, then you can go out and apply for new credit or close existing credit accounts.
Study the neighborhood: Drive around the neighborhood making your own observations. Don’t take the flyer’s opinion that it’s a “quiet neighborhood”. Take several tours at different times of the day and evening. Perhaps even walk around the neighborhood and make additional observations. Talk to neighbors and find out where the problem neighbor is. Every neighborhood has one and you don’t want this person living next door to you.
Buying a home when you’re not ready: Don’t allow anyone to rush you into buying a home until you know you’re ready. It’s easy to get into the home buying mode when key friends or relatives are purchasing new homes. Especially when your current home has lost its state of nirvana. Be your own boss, don’t let anyone rush your plans to buy; you’ll know when you’re ready.
Not buying a home when you are ready: Lastly, don’t sit on the sidelines forever. No one truly knows what the real estate market is going to do. So when you’ve done your research and you know you’re ready, dive in. Tour the home and then a couple of days later schedule a follow up tour. If the home still meets your needs and it falls inside of your budget, make your move! Trust your instincts; make you best deal and enjoy it.
Tuesday, May 20, 2008
Friday, May 16, 2008
Fradulent Foreclosure Relief
Perhaps one of the most insidious manners in which humans prey upon one another is when one individual is hurt, stunned or injured. Most home owners are decent folk. They bought a home with a mortgage fully intending to make every payment. But then life happened.
For whatever reason, and there are many, first one payment was missed and then a second. Now 60 days late on mortgage payments the strain and embarrassment are almost too much to bear. Any family finding themselves in this position is vulnerable to a very real type of home equity fraud.
At every home closing there are what seems to be an endless stack of papers and countless places for you to sign. After the first few sheets the massive amount of information contained in these documents serves as an effective novocane for the brain. In short there are very few borrowers who are capable of retaining more information than the monthly payment amount and a ballpark estimate of their interest rate.
This mind numbing experience is overwhelming for most borrowers, so much so that they resign themselves to never truly understanding it all. And herein lays the danger.
When the borrower finds themselves more than 30 days in arrears on their mortgage payment, the lender places a negative mark on the borrower’s credit. They do because one of the papers every borrower signs at closing is the agreement that should they make late mortgage payments the lender will report this to the credit repositories.
When the borrower becomes 60 days late, because this late payment involves real estate, the event falls into the category of public information and is filed in the county where the property is owned. Anyone can research this information and for a small fee obtain an official report of properties at risk of foreclosure.
Unscrupulous people take this report and, under the guise of helping the home owner “get back on their feet” actually commit a series of acts placing the home owner in a worse situation than where they currently find themselves. The con goes something like this.
The con contacts the home owner who is seriously in arrears with their lender and promises to put their experience and knowledge to work for them helping them “catch back up” on back payments and keep their home. The home owner is already fearful of losing their home and any equity they have built, so they welcome this redeemer into their home.
This knight in shining armor produces a stack of papers that at first glance promise to help the home owner keep their home without having to file bankruptcy and without further damage to their credit report. Instead of protecting themselves and their home they have in fact signed the ownership of their home over to the con.
The con is experienced in what he does next. Once he is legally placed on title of the home, he can and does take out a second mortgage removing as much of the homes equity as possible.
Not only does he not make good on any of his promises to help the home owner “catch up” on back mortgage payments, he also robs them of any equity they had in their home. This leaves the home owner in far worse condition than before. He walks away from the entire situation thousands of dollars richer than he was before.
There are legitimate agencies that can help anyone who finds themselves in arrears with their lender. One such group is the Homeownership Preservation Foundation. Here home owners can find guidance and counseling to help them avoid foreclosure. Contact them at 1-888-955-HOPE. This service is available 24 hours a day and provides counseling in multiple languages.
An additional resource defining key mortgage terms can prove helpful to anyone going through this painful process. Knowledge and understanding are even more critical when vulnerability is at it greatest. This resource can be found at: http://www.fanniemae.com/aboutfm/pdf/key_mortgage_terms_eng.pdf.
For whatever reason, and there are many, first one payment was missed and then a second. Now 60 days late on mortgage payments the strain and embarrassment are almost too much to bear. Any family finding themselves in this position is vulnerable to a very real type of home equity fraud.
At every home closing there are what seems to be an endless stack of papers and countless places for you to sign. After the first few sheets the massive amount of information contained in these documents serves as an effective novocane for the brain. In short there are very few borrowers who are capable of retaining more information than the monthly payment amount and a ballpark estimate of their interest rate.
This mind numbing experience is overwhelming for most borrowers, so much so that they resign themselves to never truly understanding it all. And herein lays the danger.
When the borrower finds themselves more than 30 days in arrears on their mortgage payment, the lender places a negative mark on the borrower’s credit. They do because one of the papers every borrower signs at closing is the agreement that should they make late mortgage payments the lender will report this to the credit repositories.
When the borrower becomes 60 days late, because this late payment involves real estate, the event falls into the category of public information and is filed in the county where the property is owned. Anyone can research this information and for a small fee obtain an official report of properties at risk of foreclosure.
Unscrupulous people take this report and, under the guise of helping the home owner “get back on their feet” actually commit a series of acts placing the home owner in a worse situation than where they currently find themselves. The con goes something like this.
The con contacts the home owner who is seriously in arrears with their lender and promises to put their experience and knowledge to work for them helping them “catch back up” on back payments and keep their home. The home owner is already fearful of losing their home and any equity they have built, so they welcome this redeemer into their home.
This knight in shining armor produces a stack of papers that at first glance promise to help the home owner keep their home without having to file bankruptcy and without further damage to their credit report. Instead of protecting themselves and their home they have in fact signed the ownership of their home over to the con.
The con is experienced in what he does next. Once he is legally placed on title of the home, he can and does take out a second mortgage removing as much of the homes equity as possible.
Not only does he not make good on any of his promises to help the home owner “catch up” on back mortgage payments, he also robs them of any equity they had in their home. This leaves the home owner in far worse condition than before. He walks away from the entire situation thousands of dollars richer than he was before.
There are legitimate agencies that can help anyone who finds themselves in arrears with their lender. One such group is the Homeownership Preservation Foundation. Here home owners can find guidance and counseling to help them avoid foreclosure. Contact them at 1-888-955-HOPE. This service is available 24 hours a day and provides counseling in multiple languages.
An additional resource defining key mortgage terms can prove helpful to anyone going through this painful process. Knowledge and understanding are even more critical when vulnerability is at it greatest. This resource can be found at: http://www.fanniemae.com/aboutfm/pdf/key_mortgage_terms_eng.pdf.
Wednesday, May 14, 2008
How to Stage Your Home for Quick Sale
Thanks to the abundance of home improvement shows on some cable T.V. channels home shoppers have higher expectations than they once did. When the average home shopper drives by a home first impressions are more important than ever. And when they walk into a home for the first time it truly is the subjective elements that can make the difference between them making an offer or taking a pass.
Most home sellers could benefit from the services of a home stager. Home stagers provide everything from a written evaluation of ways to maximize the home’s features to providing contract labor for any suggested improvements to additional furnishings and decorations.
Staging Solutions by Suzan owner, Suzan Knutson provides several helpful ideas for anyone looking to stage their home for optimum sale. “First they need to have a stager come by for a consultation visit.” This is not as intimating as it may sound but Knutson warns that home owners should be prepared to hear suggestions that will stretch their imagination.
Knutson related one home she staged where she took the oversized entertainment center apart and used the two end pieces as bookcases in the study. “Most people have lived in their home so long that they can’t imagine their furniture being in another room of the house” said, Knutson.
The front porch is critical to making a feel good first impression. Knutson says home sellers should get a new doormat and even paint the front door a nice complimentary color. Seasonal flowers placed in decorative pots can serve to draw potential buyers into the home for a closer look.
Knutson has 13 home staging secrets and shared several with me. “I’d like to share them all, but if I did, why would people need me?” She said with a smile. Knutson recommends to think of staging your home like you would if you were selling your car. No one would think twice about detailing your vehicle before selling it; it should be the same with your home. But when considering a stager’s suggestions don’t get offended. You have lived in the home and like it, but the stager is charged with making the home sellable.
Home Staging Secret One: Conquer the clutter. This means minimizing the nick-nacks that sit around the home. It also means thinning out the closets and other storage areas. Cluttered shelves and overstuffed closets and storage areas give the impression that the home is too small to be lived in comfortably.
Home Staging Secret Two: Less is more. This means that you might be asked to take out as much as half of your furniture. “Remember your selling square footage, not furniture” Knutson says. Potential buyers want to see open floor plans and bright rooms.
Home Staging Secret Three: Accessorize in odd numbers. In other words put three candlesticks on the mantel, or 5 decorative rocks in a display bowl. Knutson advises that odd numbers of accessories are more appealing than even.
Home Staging Secret Four: Paint it black. If the furniture left in the home shows signs of wear like a wood breakfast table and chairs, paint the chairs black and the table an accent color. If the coffee table has seen better days paint it black.
“The benefits of using a home staging services are easy to point out” Knutson says. Staged homes bring a higher selling price. Staging a home can be done with little or no cost apart from the initial written report which in many cases can be as low as $75. Staging a home can sell much quicker than the same home not staged.
If you’re looking to maximize your selling price and shorten the time your home stays on the market consider using the service of a home stager. Suzan Knutson can be contacted at her website: www.knutsonsellsgreathomes.com or via email at: suzankk@cox.net.
Most home sellers could benefit from the services of a home stager. Home stagers provide everything from a written evaluation of ways to maximize the home’s features to providing contract labor for any suggested improvements to additional furnishings and decorations.
Staging Solutions by Suzan owner, Suzan Knutson provides several helpful ideas for anyone looking to stage their home for optimum sale. “First they need to have a stager come by for a consultation visit.” This is not as intimating as it may sound but Knutson warns that home owners should be prepared to hear suggestions that will stretch their imagination.
Knutson related one home she staged where she took the oversized entertainment center apart and used the two end pieces as bookcases in the study. “Most people have lived in their home so long that they can’t imagine their furniture being in another room of the house” said, Knutson.
The front porch is critical to making a feel good first impression. Knutson says home sellers should get a new doormat and even paint the front door a nice complimentary color. Seasonal flowers placed in decorative pots can serve to draw potential buyers into the home for a closer look.
Knutson has 13 home staging secrets and shared several with me. “I’d like to share them all, but if I did, why would people need me?” She said with a smile. Knutson recommends to think of staging your home like you would if you were selling your car. No one would think twice about detailing your vehicle before selling it; it should be the same with your home. But when considering a stager’s suggestions don’t get offended. You have lived in the home and like it, but the stager is charged with making the home sellable.
Home Staging Secret One: Conquer the clutter. This means minimizing the nick-nacks that sit around the home. It also means thinning out the closets and other storage areas. Cluttered shelves and overstuffed closets and storage areas give the impression that the home is too small to be lived in comfortably.
Home Staging Secret Two: Less is more. This means that you might be asked to take out as much as half of your furniture. “Remember your selling square footage, not furniture” Knutson says. Potential buyers want to see open floor plans and bright rooms.
Home Staging Secret Three: Accessorize in odd numbers. In other words put three candlesticks on the mantel, or 5 decorative rocks in a display bowl. Knutson advises that odd numbers of accessories are more appealing than even.
Home Staging Secret Four: Paint it black. If the furniture left in the home shows signs of wear like a wood breakfast table and chairs, paint the chairs black and the table an accent color. If the coffee table has seen better days paint it black.
“The benefits of using a home staging services are easy to point out” Knutson says. Staged homes bring a higher selling price. Staging a home can be done with little or no cost apart from the initial written report which in many cases can be as low as $75. Staging a home can sell much quicker than the same home not staged.
If you’re looking to maximize your selling price and shorten the time your home stays on the market consider using the service of a home stager. Suzan Knutson can be contacted at her website: www.knutsonsellsgreathomes.com or via email at: suzankk@cox.net.
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