Real Estate Urban Legends

There are several television programs devoted to proving urban legends about hundreds of different topics wrong, and real estate is no exception. Seller’s basically handing their homes over to buyers, seller financing given out with no problems, and cosmetic work on the home for nearly nothing? All Urban legend! Real estate is definitely more affordable than it used to be and Realtor.com share a few myths that you may encounter in today's market.

Myth #1: Bad Credt,  No problem!

• Most sellers will need to pay their mortgage off before selling their home. If the sellers finance the home sale themselves opposed to requiring the buyer to take over the mortgage or providing other means to pay for the property, they then need cash available to pay the mortgage off.  Most buyers intend to use the earnings from their home sale to invest in the purchase of their next home.
• Even for the few sellers who are able to provide seller financing, they will more than likely opt out of the option because of the risk involved in collecting payments for 10-30 years.
• The sellers who will openly provide seller financing often want premium pricing and interest- some will also require not only a large down payment but a credit check.
• Although financing through a seller opposed to the traditional lender sounds like a great idea, you may be at risk as the buyer. If the seller fails to make a payment to the bank, you may lose your house to a foreclosure.
• A local attorney specializing in real estate to document the transfer and financing may be a good idea

Myth #2: “Fixer upper” saves money!

• Sellers typically update the painting and carpets to make the home look fresh and to get as much money as possible from the sell of their home.
• Homes in need of a little work aren’t selling as quickly today if at all, so they are doing more touch ups to make their homes look more appealing.
• It’s still possible to obtain a discount on a home in need of work but most discounts are going to be on homes with bigger projects needed such as a new roof, window replacement etc.

Myth #3: First time home buyer financing

• FHA loans are available to those whom qualify regardless of if they have owned a home (or two) before or even own one now.
• Most FHA programs still available involve down payments and/or closing cost assistance.
• The majority even require some cash be put into the transaction with the hopes that with the buyers own money put into the home, they will be less likely to walk away from the purchase. The other theory is, it takes some serious discipline and money management to save up for a down payment on a house, with that goal being obtained it appears a more responsible home owner would be present.

CLICK HERE to read the full article on this topic provided by Realtor.com

How Foreclosures Are Priced

In this kind of market, we are seeing many more foreclosures than we have in the past which often leaves us wondering not only about the home itself but why it is priced lower than homes in the area. Realtor.com helped to shed light on how foreclosures are priced, here are a few points they mention...

First thing is first, once the lender takes possession of the foreclosed home, while there are many steps to be performed before the home goes on the market, a Broker’s Price Opinion (BPO) is prepared.

• The BPO is prepared in a similar way as an appraisal. A report is run with homes currently on the market as well as any comparable sold properties.  When the market value is established, the asking price can be determined. This is done by calculating what work needs to be done to bring the home up to standard.
• A requirement in the last section of the BPO, is for the prospective listing agent to provide an as is value, repaired value and a 30-day value. The 30-day value Is an opinion of what kind of offer the lender should receive within 30 days. The offer, or amount of the offer, can vary greatly from other surrounding homes, depending on the market conditions for that particular neighborhood.
• An asset manager typically orders one more BPO and appraisal before a pricing decision is made. Most foreclosures go on the market priced at par value excluding repair costs.

Do Bank Owned homes always need a lot of work?

• If you see a home on the market for $175,000 in a neighborhood of homes priced  at $200,000 you should have a great idea of how much work is needed.  Typically, the list price of the bank owned listing is priced accordingly that is why it is such a great price. Repair costs are typically estimated by using a professional at standard cost. These estimates are typically the buyers responsibility.

What if there are multiple offers submitted on a Bank Owned property?

Here is what you can expect:

• Say you decide to place an offer but find you are up against another offer, which offer will the asset manager be more likely to favor? If the offers are close in price, an owner over an investor will be chosen. Cash over finance unless the asset manager’s bank is being used. No inspection over inspection.  Needless to say, the easier path, with the least amount of bumps in the road, is what will be chosen in most cases.

Try to remember, the pressure an asset manager can be under is escalated. They not only have to get the most amount of money for the home in foreclosure they also have to sell it as fast as possible. What a conflicting roll when the lower the cost the faster the sale! 

For more information on this article, CLICK HERE.

Maximize Space & Light in your Bathroom

Here are a few easy tips from the DIYNetwork to help you maximize space and light in your bathroom. If you are thinking of putting your home on the market, maximizing space and light in all rooms, especially the bathrooms, is key to a successful showing.

White and Wood

·         White molding mixed with a richly finished cabinet help keep the room light. Corner windows and sconces up-turned help to reflect light off the ceiling, keeping the space bright.

Night Light

·         Place pebbles below a clear glass countertop with blue or white LED rope lighting illuminating below for fabulous lighting.

Sticks and Stones

·         When natural-stone sinks are paired with log-haw wood, a nature setting is inevitable! Place a rough cut piece of wood at the top of dual mirrors. A glass waterfall in between the mirrors tops the space off!

Mix and Match

·         Don’t be afraid to use a variety of materials. Place a brushed-nickel bathtub on stones making an amazing contrast when placed next to a textured glass sliding door lined with rough wood.

Enjoy the view from all sides

·         Enjoy the windows allotted to you. A tub/shower placed next to a window allows for a view of the outdoors regardless your preference of bath or shower.

Mood lighting

·         Placing tea lights behind the tub helps to set the mood for relaxation.

Practicality Counts

·         If you have several kids in tow, it’s a great idea to think about making the most of your space. Three bathroom sinks and mirrors saves time. Automatic hand dryer and toothbrush sanitizer, saves not only money  but space!

Vanity Nightlight

·         Placing rope lighting under the vanity illuminates on the floor not only makes those midnight visits easier for the little ones but looks great as well.

Go Into the Wall

·         Frame recessed cubbies using reclaimed wood.  These great cubbies can be used for bath towels saving space. Hanging a chandelier over a self standing tub help to add a classic style with a unique feel!

Sometimes it might be easier to hire a professional to help you with these decorating decisions. Keep in mind real estate agents and stagers are a perfect resource to help you get started!

To read more on this article Click Here.

Could you have unknown liens against your property?

There have been times when a seller goes to transfer their home, and is shocked to find a lien waiting for them. 

What is a lien?

•  A lien is a declaration placed on an owner's home in order to settle a debt which could be accrued by owing child support, tax related debt, and many more.

Liens can come from several places. One example, is a lien against your home from an unpaid bill from a home improvement project. Another type is a Federal tax lien. 

See these videos for examples on different types of liens:

Contractor Lien Example

Federal Tax Lien

Different Types of Liens

As a homeowner or potential homeowner, it is important to educate yourself on this topic. The moral is, if you're thinking of selling, take a minute to speak with your mortgage company to ensure there are no unexpected surprises before putting your home on the market. 

Facts about liens:

• In most cases, the seller has 30 days to clear up any liens.
• If the situation is not resolved quickly delays in closing can add additional hardship and costs for both the buyer and the seller.
• If the mortgage is paid off and a lien is found, it can still take up to two weeks to close and equity line of credit, which can be the cause of the lien placed against your home.
• Most banks want to ensure no last minute purchased have been made on your line of credit once the house is sold.

If you have further questions about this subject, please feel free to contact us!

For more information on this topic, also see this article about liens posted on Realtor.com.

To Rent or Buy in Cleveland?

Recently, we have seen a sudden rise in the Northeast Ohio rental market. The spark in the number of people looking for rentals has left the market dry of rental properties. With the simple effect of supply and demand, some rental prices have now gone up.

If the cost of a rental is on the rise, have you even explored the option to buy?  With low interest rates and dropping home prices, you might be surprised what you can afford!

In an article published by RISMEDIA, April 25, 2011, the author explains in more detail.

The article explains when the housing bubble burst in 2006, the cost of buying a house was considerably higher than renting that same house in most areas. Today, the opposite is true in many states, particularly those hit hardest in the housing crash – namely Arizona, California, Florida, Nevada and right behind them Illinois, New York and New Jersey.

A recent study by Deutsche Bank reported the share of income Americans are now paying to own their homes is 9.8% after mortgage, taxes and insurance payments – down from 17.2% at the housing bubble’s peak. Conversely, the study further says that in 28 out of the country’s 54 major markets, it’s now less expensive to pay a mortgage and other major housing costs than to rent the same house.

Want to know how to figure out if buying is better for you than renting?

Each real estate market is different, to find out details of the area you are interested in contact the Garfield Group.

Conducting an analysis is not difficult. Start with the total cost to rent a home or apartment – “total” meaning rent, insurance, maintenance/association dues.

Then, determine the cost of buying comparable housing; for this is a little research is necessary. Garfield Group can help you figure out the current sales prices of homes in areas of interest. A REALTORr, Garfield Group, can also help you discover what you can expect to pay for taxes, utilities, insurance, etc.

Lastly, talk to a local bank or mortgage broker to ascertain the availability and cost of the mortgage needed to buy the home.

All of this information is worth taking a look at before settling for a high priced rental. In the end, buying may or may not be better for you but educate yourself on the subject.

For more information Contact the Garfield Group with RE/MAX Traditions. They can point you in the right direction and help you determine whether to rent or buy.

For more information on this article CLICK HERE.