Updated: Monday, January 24, 2022

Beware of Buyer Bad Habits

Unless you buy and sell several properties every year and concentrate on the investment side of these purchases, you probably dont have enough practice buying real estate to be really good at it.

If practice makes perfect, then without going through the real-estate-buying process a few times within a short period of time, your buying skills are less than perfect. Since most buyers, especially first timers and first-time-in-a-long timers, want just one propertytheir perfect home, their dream homethere may be a serious problem here.

When you tackle something new, complex, and essentially foreign to you, do you expect to get it right the first time?

With real estate, mistakes can be expensive and hard to live with. On the other hand, smart purchases can save money, improve quality of life, and keep you safe in these troubled times. Quite a gap.

Many buyers are their own worst enemy.nbsp;

They insist that they want to own their own home and then they act in almost-DIY ways that put that outcome at risk:

1. Analysis Paralysis

Spreadsheets can be a downfall for real estate buyers. The goal is not to analyze all the houses or condominium units in your preferred neighborhoods, but to buy one home. Once you start collecting data and spending time calculating, instead of focusing on your up-coming purchase, you are off track.

Your real estate professional must be the one who is all about data, not you. Their job is to know the current trends and anticipate whats coming next, so they can select the best properties to show you. Benefit from your real estate professionals expertise:

1 Ask your professional how to really look at a property when you view a house or condominium. You want to see the bones of the house, not clever decor which can hide imperfections or distract from problems.

2 Understand what youll get for your money in a price range, in a location, or in a property >

Your role is to determine what you want, need, and want to avoid in your new home. You should be an expert on that, not on whats up in real estate in general. Focus on what you are looking for, not on what other buyers or your friends are doing. Your real estate professional is following neighborhood data closely and will >

Get home buying right: If you love data, select a real estate professional that loves it too. Not just someone who will swamp you with numbers to keep you happy and distracted, but a professional intent on locating that perfect match with as little hassle as possible and at the price that matches your budget. Let the real estate professional gather details on all the listings out there. Thats their job and they use this information to help the many buyers they work with. You want to understand values in your preferred area, so that you can make a smart, practical offer on the right home.

2. Looky Loos

Have you and your partner made viewing homes your favorite entertainmentonline and off? When viewing, are you looking for reasons why a property wont work for you instead of mentally re-imagining someone elses home as your dream home? Even staged real estate doesnt tell buyers the whole story about what a home can become. When you can imagine your future in that house or condominium unit, make an offer.

Double-digit viewings mean you have lost sight of why you want to move and what you should invest in. Do you see that new life, perhaps downsizing, or are you holding on to the past? If you are in the right price range and location, why arent the properties a match for you? Is the real estate professional just not listening to you or are you not conveying the right information? Review your budget and goals together. Stop wasting time and get on target.

Get home buying right: Virtual viewing and open houses can make this obsession worse. Making a decision about which real estate to buy can become even harder. Many of us love looking at real estate for a wide variety of reasons. Thats why there is so much media to allow us to do just that. But searching for a home to buy is a different activity with different perspectives. Let your real estate professional narrow the viewing range for you, so confusion and indecision are not your prime reactions.

3. It takes an offer

Recently, I met two couples who are intent on buying, but are very discouraged at seeing so many houses and having nothing to show for this effort. When I asked how many offers each couple had made, I was surprised at their answer: none. They had seen properties that would work for them, but neither couple made an offer.

They are shopping in different price ranges and different areas, but they have the same two problems:

1 They are fixating on the below-market listing practice designed to generate multiple offers. This is distracting them from deciding what each property is worth to them. These buyers want to know what the owner wants, so they can offer that price but no more, that is, get it right. Not knowing exactly which is the right price to offer is keeping them from making an offer on anything.

2 Making an offer is not an automatic next step for buyers. They may not know the buying process. The real estate professionals for these buyers have not asked if their buyers want to make an offer. If these buyers are not told when to consider making an offer, they may never get there.nbsp;

Not asking buyers to make an offer is one of the most common mistakes inexperienced, lax, or distracted real estate professionals make.

Get home buying right: Making an offer does not cost anything. Nor is it any work for the buyer. The real estate professional, with technologys help, takes care of those details and gets the job done. Their professionals analysis of market value can help dispel confusion regarding price.

4. Going Backward Financially

However you celebrate the spend-a-thon holiday season, do not make your credit card and debit card the prime holiday stars. Progress through this short season, without spending beyond your means. Celebrate using your brain and your creativity instead of spending according to someone elses marketing plan. The greatest gifts are shared experiences and your time.

Racking up huge credit card debt and emptying out your debit card account will impact your home buying in two ways:

1 Undermining your financial flexibility may make it harder to qualify for a large-enough mortgage or to pay >

2 Decide which is more important to youa home or holiday spending. The time and money spent shopping, online or off, could be applied to house hunting.

Get home buying right: Listings on the market in December are owned by serious sellers, so get out there and make a deal.

Leverage the experience of real estate professionals. They want you to.nbsp;

The right professional will help you get home buying right

Happy Home Buying

A Safe, Rewarding Holiday Season to All

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What is Fannie Mae HomeReady?

Fannie Mae is officially known as the Federal National Mortgage Association FNMA. Fannie Mae is a government-sponsored enterprise but is private.

Congress chartered the organization during the Great Depression as part of the New Deal. The goal of creating the organization was to stimulate homeownership and provide more liquidity into the mortgage market. The purpose of Fannie Mae remains to help low and moderate-income borrowers get financing for homeownership.

Fannie Mae doesnt originate or give out mortgages. Instead, the organization buys and guarantees mortgages through a secondary mortgage market.

Since Fannie Mae invests in mortgages, it gives lenders more liquidity. With more liquidity, lenders can fund more mortgages.

The other buyer of mortgages in the secondary market is Freddie Mac, also chartered by Congress.

What is HomeReady?

A HomeReady mortgage is geared toward low and moderate-income borrowers who have good credit. Fannie Mae sponsors the mortgages under this program. The program is similar to Home Possible from Freddie Mac.

With a HomeReady mortgage, qualifying borrowers can make a 3 down payment instead of 20. The pricing on a HomeReady mortgage is comparable to or better than standard mortgage pricing.

The financing costs and mortgage insurance costs are low.

How Does the Program Work?

The HomeReady program is available to both first-time and also repeat buyers. You can also use the program if you want to refinance an existing mortgage. You need to have a credit score of at least 620. If you have a score of 680 or higher, you can get better terms.

You may be eligible if your income is 80 or less of the area median income for the census tract where a property is located. This includes properties that are located in low-income census tracts.

You can have ownership interests in other residential properties and still be eligible as a borrower under HomeReady, but only one property can be financed when you close.

Program Benefits

Along with a down payment of just 3, as we touched on, when you qualify for a HomeReady mortgage, you can get pricing thats at least equal to if not better than the standard. You can also take advantage of mortgage insurance coverage requirements that are below the average when your loan-to-value ratio is anywhere between 90-97.

You dont have to use a minimum amount of personal funds for your down payment and closing costs. You can instead use sources like grants, gifs, or Community Seconds mortgages.

The terms of the HomeReady mortgage are highly flexible. Family members and parents can be listed as co-borrowers even if they arent going to live in the home. If you were going to buy a house with a rental unit attached, you could use future rental income as part of your eligibility to qualify for the loan.

Are There Downsides of HomeReady Mortgages?

There are a few potential downsides to think about with HomeReady.

First, there are limits on how much you can borrow. Fannie Mae uses a conforming loan limit, and in some parts of the United States, housing prices on average might be much higher than this. This can include even affordable properties >

In some areas, if 115 of the median home value is beyond the conforming loan limit, then theres a higher baseline limit. However, even though you can borrow a higher amount doesnt mean that it isnt risky to do so.

Special populations, including public servants, might have access to more flexibility if they use the program, and the loans dont require manual underwriting.

Similarly, there are flexibilities for people with disabilities.

All borrowers have to go through homeownership counseling through Framework, an online course approved by HUD.

The HomeReady program has advantages for some buyers if you meet the qualifications. Of course, if you can put more money down on a home, it can be better financially to do so because you start out right away with more equity. Not everyone has that option though, so HomeReady makes owning a home a reality when it might not otherwise be.

Are There HomeReady Alternatives?

One alternative to HomeReady is Home Possible from Freddie Mac, but there are also FHA loans. FHA loans have less stringent financial requirements for homebuyers, as is the case with HomeReady. The required down payment is just 3.5 if you qualify. You only need a FICO score of 580 or higher for an FHA loan, but your debt-to-income ratio has to be 45 or less.

The federal government backs the FHA loan. HomeReady is backed by a private lenderFannie Mae. FHA loans have a higher down payment requirement and limitations on using gifted money. HomeReady loans allow for alternate credit reporting but FHA loans dont.

Both types of mortgage can be applied for through local and national lenders, as well as online lenders.

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Should Real Estate Agents form an LLC?

If youre a real estate agent working as a self-employed professional, or an independent contractor, you should consider setting up an LLC. The same is true if you work for a brokerage, but you work similarly to an independent contractor and file 1099s for your tax returns.

When youre an independent contractor, you have freedom and flexibility compared to being a salaried employee. There are more responsibilities you have to adhere to, however.

Specifically, in terms of being a real estate agent, if a buyer or seller were to sue you and operate as an independent contractor without a separate corporate structure, you could be personally liable for damages. You could lose all of your assets as a result.

An LLC provides you with the protection you need.

What Is an LLC?

An LLC is a Limited Liability Company. An LLC is one legal entity that someone can form to own and operate a business. LLCs provide the same limited liability as a corporation, but theyre popular because theyre cheap and easy to set up and operate.

Any time youre going to start, or you already run a business as a sole proprietor, you should think about forming an LLC.

An LLC can be used to run almost any kind of business and one of any size.

If you also own rental or commercial property, an LLC is a very common structure.

LLC Benefits

General benefits of an LLC, whether youre a real estate professional or not, include:

LLCs protect your personal assets. You, as the LLC owner, are typically not responsible for debts incurred by your business or because of business->

Theres a benefit of an LLC which is known as pass-through taxation. If you have profits or losses, they pass through the business to your personal tax return. Your earnings are taxed at your personal tax rates. You might qualify for a pass-through tax deduction, which took effect in 2018 under the Tax Cut and Jobs act.

Its simple to set up an LLC and operate a business under this entity. You dont need to worry about things like officers and directors, which you need if you set up a corporation.

Theres flexibility in terms of management, taxation, and overall ownership.

Youll improve your credibility as a real estate professional when you have an LLC.

One of the big mistakes a lot of new and even more experienced real estate agents make is not separating their business and personal finances. You might, for example, put business expenses on a personal credit card. This can create not only legal liabilities but an overly complicated financial situation, particularly around tax time.

There are a few disadvantages of an LLC. It may cost a little more to set up and operate than a sole proprietorship, but not hugely so.

The only other real downside would be for a business planning to seek outside investors, which isnt likely the case for you if youre a real estate agent.

How Do You Start an LLC?

Starting an LLC as a real estate agent or professional should be something you can do pretty easily on your own. You do have to follow whatever the rules are in your state, but generally, you start by choosing a name.

You have to make sure its not the name of any other LLC or entity already registered in your state.

Youll then file articles of organization with your states corporate filing office. It may cost a few hundred dollars to start the process.

If youre a real estate professional and you havent already set up protection for your personal finances in the form of an LLC or another entity, its a good idea to consider doing so.

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Ask the HOA Expert: The Meeting Agenda

Question: How does the board choreograph a meeting if not allowed to meet privately in advance? We have always scheduled work sessions every other month prior to the open board meetings. Some members are calling us on it. Some board members have said they will resign if they have to face a room full of homeowners every month.

Answer: The choreography of a meeting is called a "Meeting Agenda". The board is always allowed to formulated an agenda ahead of the meeting. The board is not permitted to discuss or make decisions concerning the agenda item content outside the meeting venue. An agenda can be discussed and approved by email, phone, face to face or any other means.

Question: Whats the best procedure for filing a rule violation complaint with the HOA? We are getting bombarded with verbal complaints.

Answer: It depends on what the nature of the complaint is. If it is a noise issue, the affected resident should first be required to address the issue in person with the offender unless there is a threat of violence keeping a record of the issue, date, time and what the response was. If it happens again within a short period of time, say, one week, an email or letter should be directed to the board/manager with the details for further action.

If the issue involves something like parking, roaming pets, an email or letter should be directed to the board/manager with the specific details.

Do not take complaints verbally either in person or over the phone. Theyre too easy to pull off. Require it be put in written form with all the details. It will generally reduce the number of complaints and put the issue in the complainers own words to eliminate misunderstanding.

Question: Our HOA sent out notices for our Annual Meeting by both regular mail and email. Our president prepared and sent the email notice and proxy without approval from the board. In the email notice, the president wrote that responding "Yes, a board member" was enough to assign their proxy to a board member. Is that allowed?

Answer: Transacting HOA meeting business by email may or may not be allowed by your governing documents or state statutes. Even if it is, a proxy needs to be in writing and carry the members signature to avoid fraud. The board or president has no authority to make up new standards for how proxies are handled.

Question: We divide our expenses equally, however, the master insurance policy premium is being allocated according to unit square footage which varies. Is that okay?

Answer: Unless the governing documents specifically permit a square footage allocation of insurance premiums, they should be allocated the same way as other expenses. Another common error occurs where, for example, the annual budget is allocated according to a square footage formula and a special assessment is assessed equally. Regardless of the type of assessment, the same allocation formula should be used. The board has no authority to change how expenses are allocated.

For more innovative homeowner association management strategies, see www.Regenesis.net

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Refinancing: The Risks of Waiting

If youve been thinking of refinancing lately, as many certainly have, it might be a good move to go ahead and make the move. Especially for those who have been on the fence over the past few months. The market has been >

What are these risks? The biggest is rates moving to higher levels and never looking back. Conventional fixed rate mortgages are tied to mortgage bonds. And just like any other type of bond, when there is a demand for the bond the price goes up which inversely affects the yield, or the rate of return. Investors pour money into bonds not as a vehicle for income but more importantly as a safety vault. Stocks can be volatile, but the returns can be greater. Conversely, stocks can also move down causing investors to lose money. Bonds provide protection for such volatility. Bonds arent there to provide a healthy rate of return but a healthy dose of safety.

Rates moving lower typically means a series of unflattering economic reports over a period of time. Rate volatility can also be impacted by geopolitical moves. Global instability can cause investors to get nervous, pulling money away from the stock market and into the safety net of bonds.nbsp;

If something does happen that causes investors some concern, bonds will be in strong demand which pushes rates lower. But, when things settle down or continue to remain >

Another risk of waiting is the accrued cost of doing so. Lets say that refinancing your existing loan will save you 150 per month. But youre trying to squeeze out another 0.125 which would save an additional 15. I think you see the picture here. There really arent any do-overs. Waiting a few months just to squeeze out just a little bit more could cost you. Even the savviest of economic advisers cant accurately predict the future.

Theres some math homework to be done here. There will be closing costs on every mortgage, the difference is who is going to pay for them. With a purchase money loan, the sellers, the buyers or the lender can offset some or all of those costs. With a refinance, those costs belong to the borrowers. The easy math is dividing the monthly savings into the closing costs associated with getting the mortgage. The result is how many months it would take to recover the closing costs in the form of the new monthly payment.nbsp;

If refinancing now makes sense, then the prudent move is to move forward quickly. Get your application in along with the needed documentation to get your loan in a position to lock. One final note, if you go ahead and refinance in todays market and a year from now rates fall far enough where it makes sense yet again for another refinance, theres nothing holding you back about refinancing all over again.

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How America Got Its First Christmas Tree

Christmas trees now sparkle in millions of homes, but did you ever wonder how the tradition began? No doubt there are several stories regarding the start of this custom, and heres one Id like to pass along.

"Its now been more than 150 years since Professor Charles Minnigerode decorated Williamsburgs first Christmas tree," says Robert C. Wilburn, president of the Colonial Williamsburg Foundation.

"A German native, the College of William and Mary professor brought the festive tradition with him to the United States. When Nathaniel Beverley Tucker invited Professor Minnigerode to celebrate the holiday season at the St. George Tucker House, he trimmed a tree with candles and fancy paper decoration as a present for Tuckers children."

Beverley Randolph Tucker, a descendant, says that "regular sized candles were cut down and fastened on the tree, nuts were gilded, and other ornaments made. Presents were probably not distributed at this time, but there were songs, games, and refreshments." Tales of the Tuckers, 1942.

From that humble beginning and likely similar celebrations with other German immigrants, evolved what is now an American tradition observed in millions of homes.

As to the St. George Tucker house, it was donated to Williamsburg in 1993 after more than 200 years of family ownership. Used now as a donor hospitality center, the home is one of the most unusual examples of original colonial architecture to be found.

St. George Tucker was born in Bermuda and came to the colonies to study law at William and Mary under George Wythe, whom he later succeeded. He was a member of the collegiate Flat Hat Society -- a fraternity that evolved into what we today know as Phi Beta Kappa.

In 1788, Tucker bought three lots on the green in Williamsburg near the governors palace. This was once the site of the first theater in America Levingstones as well a small house. Tucker then built a home on the property which was expanded, wing after wing, until he decided to try something different: the house was pushed outward with the result that a visitor now finds parlors that have windows looking over the Williamsburg green as well as windows which look into the homes central hallway.

Such expansion was a necessity because Tucker had nine children and five stepchildren from two wives. While not all lived to adulthood, a family dinner could include Tucker as well as three children who served in the Congress at the same time: John Randolph a stepson, Beverley Tucker, and Henry St. George Tucker. His brother, Charles Tucker, a physician, was appointed Treasurer of the United States by Jefferson and served from 1801 to 1828.

"When he was in his early twenties," writes Beverly Randolph Tucker, "he happened to be in Richmond during the meeting of the Assembly at St. Johns Church and to have been sitting in the gallery when Patrick Henry made his famous Give me Liberty or Give me Death speech and immediately afterward St. George Tucker wrote what we know of the speech today."

When the Revolution began, the British seized the Williamsburg magazine to deprive the colonialists of ammunition and powder. Believing that fair is fair, Tucker sailed to Bermuda, "liberated" the British magazine, and brought tons of ammo back to the colonialists.

After the revolution, Tucker taught at William and Mary, became a judge, and 1803 published an Americanized edition of Blackstones Commentaries: With Notes of Reference to the Constitution and Laws, of the Federal Government of the United States, and of the Commonwealth of Virginia. This five-volume set is one of the foundations of our legal system and today is still in print.

Tucker held a number of opinions which are at the core of American law and custom.

On >

Tucker was also a strong believer in the concept of a free press.

"Liberty of speech and of discussion in all speculative matters, consists in the absolute and uncontrollable right of speaking, writing, and publishing, our opinions concerning any subject, whether >

Perhaps most remarkably, in a state and a society where the ownership of slaves was equated with wealth and status, Tucker wrote "A Dissertation on Slavery: With a Proposal for the Gradual Abolition of It in the State of Virginia."

"Whilst America hath been the land of promise to Europeans," he wrote in 1796, more than 60 years before the Civil War, "it hath been the vale of death to millions of the wretched sons of Africa. The genial light of liberty, which hath shone with unrivalled lustre on the former, hath yielded no comfort to the latter...."

Tucker died in 1828, and it was his son, Nathaniel Beverley Tucker, also a judge and professor of law at William and Mary, who hosted the famous tree in 1842.

No doubt if Mr. Tucker were with us today he would extend to one and all the very best wishes for this holiday season and the coming New Year.

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The Most Fascinating Christmas Traditions

Think your family tradition of dressing up in feetie pajamas and sipping hot chocolate while you drive through the neighborhood looking at holiday lights on Christmas Eve is unique?

There is a great big world full of odd and interesting and fantastic and sometimes puzzling, were not gonna lie holiday traditions out there. Weve pulled together a few of the most fascinating in our newest edition of "Did You Know?"

We promise once you see what theyre doing across the country and across the world, you wont be so embarrassed to admit that Christmas morning is all about three generations of naked gift opening. On second thought, you might want to keep that to yourself.

1. In Norway, there is a sweep on brooms following dinner on Christmas Eve as they are all hidden away out of sight. "Norwegian legend has it that when Christmas Eve comes, it brings with it all manner of evil spirits and witches. As such, its customary for households in Norway to hide all their brooms before bedtime lest any hags get their gnarled hands on them," said MSN.

Sounds like a good excuse to take a break from cleaning No word on how Norwegians feel about vacuums.

2. Guatemala also has a holiday tradition >

This symbolic cleansing ritual is said to expunge evil spirits and negative energy from the upcoming festivities... but it is perhaps more commonly accepted by Americans as "the great breakup ritual."

3. Did you know that Old St. Nick has a counterpart with a devil-like appearance and seriously unappealing name? Krampus like we said, unappealing sets out to punish bad children before Christmas, according to this Austrian and Hungarian holiday legend. "In other words, hes no jolly fat man," said Travel and Leisure. "Instead, picture a red devil with cloven hooves, horns, and a long tongue though he can take the form of a bearded wild man or huge hairy beast." Hmmm. Wed say its a tossup on which one is worse. Especially since Krampus supposedly "carries chains and a basket for abducting especially bad children and hauling them to hell." Good times await in celebration of this delightful tradition at Krampusnacht parties and Krampus Runs, "during which rowdy revelers cavort through town in beastly costumes."

4. Spending the holidays in Hawaii? Expect to see Santa "in a bright red outrigger canoe, escorted by elves in aloha shirts," said Forbes. Yes, even Santa gets into the Aloha spirit. And can you blame him? Its all part of the "Honolulu City Lights... a month-long extravaganza featuring a lighted 50-foot Christmas tree and eye-popping light displays throughout the city." Oh, and dont forget the 20-foot-tall barefoot Santa who sits dipping his toes in the fountain" at City Hall.

5. When its time to ring in the New Year, we watch a ball drop from the sky and count it down before planting a kiss on a loved one - or whomever happens to be closest to us. Perrrrrhaps that seems odd to people in other countries. But clearly Ecuador has no leg to stand on.

After all, Ecuadorans celebrate the New Year by dressing "a straw man in old clothes on December 31. The straw man represents the old year. The family members make a will for the straw man that lists all of their faults," said Scholastic. "At midnight, they burn the straw man, in hopes that their faults will disappear with him."

Its not unlike our practice of making New Years resolutions. Except for the whole burning straw man thing.

6. Heading to Christmas Eve church service in Caracas, Venezuela? Bring your holiday spirit and your knee pads. Its tradition to roller skate to church for evening services the day before Christmas - and its a tradition so embraced locally that the streets are blocked off for skaters safety.

7. If youre planning to celebrate Christmas in Sicily and Southern Italy, we hope you like fish. Because their "Feast of the Seven Fishes" tradition means youre going to get a belly full. "Traditionally, Roman Catholics in the region fast on Christmas Eve, so a feast of seven or even more seafood dishes at the end of the day is a true celebration of the areas bounty," said Delish.

Oh, and the seven fish are also fried, thanks to the fact that "many observant Catholics refrain from eating meat or dairy" before special holidays. So dont plan on going to Italy on a diet. Or on a gluten-free eating plan. Unless your goal is to crack up a Sicilian.

8. Dont expect to excuse yourself from the table if youre celebrating Christmas in Poland. Not unless you want to tempt fate, that is. "After supper, family and guests stay at the table until, at a signal from the host, they all rise in unison and leave," said California Mall. "This is the result of an old belief that the first to rise will die before the next Christmas Eve." Cheery

9. And you thought caroling was taxing. Be thankful youre not in Wales for Christmas, where their tradition includes "Mari Lwyd," which "translates as Gray Mare and involves carting a horse - either a life-size figure or someone dressed as a horse - door-to-door, accompanied by a group of colorful singers and dancers," said Travel and Leisure.

Good news though. In addition to traditional Welsh songs, "Mari Lwyd can also include a rhyme contest between the troupe and residents - a satirical back-and-forth not unlike a modern rap contest." Wait - a Welsh rap-off whilst carting a horse door to door? Were so in.

10. Forget that Christmas ham. In Japan, its all about chicken. Kentucky Fried Chicken, to be exact. "While its true that Christmas isnt really celebrated in Japan, a December 25th tradition centers on KFC," said Readers Digest. "In fact, the Colonels special recipe is so popular in Japan at Christmas that KFC suggests that customers place their holiday order two months in advance."

Readers Digest says the "chicken craze" dates back to 1974, when "KFC bosses unveiled their first Christmas meal for visiting foreigners who wanted something that resembled a traditional holiday dinner." Frankly, as long as it comes with mashed potatoes, were good.

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Top Remodels and Renovations That Actually Pay Off

In 2017, Americans spent over 6,600 per homeowner on home improvement projects. Perhaps its because of the popularity of HGTV shows, but this has been on the rise.

People are fascinated with having nice homes.nbsp;What about when its time to sell? Is it worth remodeling or renovating your home before putting it on the market?nbsp;

Lets take a look at remodels and renovations that actually pay off when its time to sell your home.nbsp;

Remodels vs Renovations

First, you should understand the difference between remodeling and renovating.nbsp;

Renovation is required when something is in disrepair. Replacing rusty pipes or a leaky toilet in the bathroom is a renovation.nbsp;

When you remodel, things may still be in great shape, but you want them to look different. That toilet is working just fine but you decide to swap it out for a more modern >

Pros of Remodeling

Your home may be in great shape, but that orange shag carpet in the rec room will narrow your pool of interested buyers. Outdated or bold accent colors or >

In a slow market, it can be even more challenging. Removing these elements and replacing them with something more neutral can improve your chances of a faster sale and for a higher price.nbsp;

Cons of Remodeling

Unfortunately, there are few remodeling projects for which youll recoup your entire investment. If your goal is to raise your asking price, remodeling is not the way to do it. You could end up spending more money than it raises the value.

Plus, remodeling is a huge inconvenience. Your home could be torn apart for weeks and youll have workmen tromping through your house all day.nbsp;

If youre going the DIY route, be prepared to spend more weekends on the project than you think. Remodels are always more expensive and take longer than you think they will.nbsp;

Pros of Renovation

Many buyers dont want to deal with repairs. By renovating the home beforehand, youll have a larger pool of buyers to work with. This can facilitate a faster sale.

A newly renovated home can also fetch a higher price. Necessary repairs can substantially lower the price buyers are willing to pay for your home. Plus, homes that sit on the market for longer tend to sell for less.nbsp;

Cons of Renovation

There is a better ROI for renovations than for remodels. However, depending on what is necessary it can still get expensive.nbsp;

Remember that selling a home can be expensive. If you dont have the cash on hand for renovations, it may be better to take a lower sale price and skip the expense of renovating.

As with remodeling, renovations require workmen tromping through your house for days on end or hours of your free time spent on DIY projects.

Most Valuable Remodels amp; Renovations

There are times when the effort put into updating your home pays off. So how do you choose projects that are worth it?nbsp;

Look for projects that are inexpensive >

Curb Appeal

Within 30 seconds of seeing your property, buyers start forming their opinion of the home. Simple things like raking up leaves or cleaning Fidos treasure off the lawn can have a big impact. Try adding window boxes full of flowers to liven up the space.

If the siding or roofing is in disrepair, consider renovating the exterior. While these are big projects, they can have a significant impact on your ability to sell.nbsp;

Unresolved problems like these can scare buyers away. If you do get an offer, they can slow down your home sale as the buyer may ask you to complete the repairs after seeing the inspection report.

Paint

Painting projects, whether interior or exterior, are excellent ways to boost your homes appeal. Paint is inexpensive, especially when you do it yourself.nbsp;

For the interior, choose light, neutral colors. This helps the space appear bigger and brighter as well as appeals to a variety of personal preferences. You want buyers to be able to envision themselves living in your home. Your beloved bold purple accent wall in the den might look great but if your buyer hates purple with a passion it could cause you to lose the sale.

Be sure to repair any dings in the walls and dont forget the ceiling.

Kitchen

The kitchen is an important room. Everyone loves to eat and this is where the deliciousness comes from.nbsp;

However, an expensive kitchen remodel has a bad ROI. It adds value to the home, but not enough to warrant the cost. Plus, your idea of a designer kitchen may not match your buyers idea.nbsp;

However, there are a few updates that are worth the trouble.nbsp;

Reface dinged-up cabinet doors. This is a much cheaper option than replacing them.nbsp;

Update old appliances with modern, energy-efficient models. Buyers love the prospect of saving on their monthly energy bills. However, stick with the low- to mid-range models. Fancy, high-end models likely wont fetch the same return.

Bathroom

The bathroom is another spot that buyers will pay close attention to. Again, designer updates normally dont bring a high return. However, a minor bathroom remodel is beneficial.nbsp;

Update the tub and replace the fixtures to give the room some extra sparkle. Thoroughly clean up any moldy areas.nbsp;

If your tile is still in good shape, consider replacing the grout. This will freshen the appearance of your tile without having to replace it. Most mildew and soap scum build up in the grout anyway.

A Market-Ready Home

When is your home ready for the market? It depends on the state of your home and the current market conditions. Talk to a local real estate expert to get an idea of what the market requires in your area. While most homes can benefit from a few renovations, most large remodels will not be worth the cost.nbsp;

These remodels and renovations will actually pay off when youre ready to list your home, but you should always figure out the cost before you take on any home improvement project.nbsp;

Feel free to continue browsing our blog for more fantastic real estate tips and tricks

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After Financing Your First Rental, It’s All Downhill From There

At its most basic level financing a rental property is not much different than a primary residence as it >

Financing programs for rental properties will require more down payment and higher rates. Why? Because when someone finds themselves headed into some degree of financial stress, the last thing they want to give up is their primary residence.nbsp; When push comes to shove, the rental properties will be off-loaded first, securing the primary residence as a place to live. Financing the first requires more documentation, but after that, financing a second and third rental is easy-peasy in comparison.

With an initial rental, buyers must be able to comfortably afford the new purchase along with their current mortgage. Lenders use the mortgage payment on the new property which includes principal and interest, taxes and insurance in addition to what theyre currently paying on their current home. That might sound a bit unfair at first because a rental property typically generates enough income each month to more than cover the costs of ownership.nbsp;

Otherwise, real estate investors might pass on a unit that doesnt cash flow. The new property turns into a monthly expense instead of monthly income. Ultimately it means qualifying with two house payments even though the income is there, its just that lenders wont consider it. But things change with the next rental property.

With the subsequent unit, the income generated from the home can in fact be used to help qualify. That is after two years have passed. Why the time test? Lenders want to see the owners can properly manage the property, keep it rented and maintained. Being a landlord means extra work. After the first year or so of ownership, some first time investors find out that managing the property is simply too much work.nbsp;

If after two years have passed, the income can be used. Now there is effectively just one mortgage payment, the primary residence. The second rental unit mortgage payment is not only offset by the rent coming in each month but providing the owner with some additional income at the same time.

When investors discover this underwriting guideline for a second rental, they may decide to acquire a third or fourth. Qualifying for the second unit and beyond is much easier due to the fact that lenders willnbsp; use the additional income.nbsp;

In fact, its not uncommon for investors to own multiple rental units because its so much easier to qualify for the subsequent purchase. When an investor does own several rental units, a property manager is essentially a must. It can also be the case where investors who own multiple units decide the working world isnt worth it any longer and instead own, manage and maintain their units and live off the rent.

Theres a little math involved when considering a rental purchase but not very much. If theres a positive cash flow, then its time to submit an application and get the preapproval process moving forward. Youre then likely to begin looking for the next property. Yet the approval process will be much easier.

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Should You Hire an Interior Designer?

Whether youre moving to a new home or considering a refresh or remodel for your current one, you might be asking yourself whether or not you should hire an interior designer. A designer is someone who can create a beautiful space, but this scenario isnt for everyone.

The following are considerations and both pros and cons that come with working with a designer.

What is Your Budget?

Budget will have to be the biggest consideration when you think about whether you should hire a designer. Designers are not cheap, particularly when theyre experienced. If youre doing a remodeling project or moving into a new home, you have to think about the significant costs a designer can add to your overall budget.

Some designers will charge a flat fee. Others will charge by the hour.

Some designers will make purchases on your behalf and charge a percentage on each item they buy.

Regardless of the pricing structure, talk to some designers in your area to get a feel for the rates. You may figure out a designer isnt even in your budget. It could force you to sacrifice in other areas of your project that youd rather not if you hire someone.

What Services Do You Need?

Designers can do a lot of different types of work, and they may have varying areas of specialty. Services many designers offer can include design consultations, space assessment and space planning. Designers may offer purchasing and procurement or full-scale project management if youre doing a remodel or custom build.

Some designers wont work with you unless youre paying for their full services, but others will charge by the hour and work with you on an as-needed basis.

Do You Have a Distinct >

When you hire a designer, even if their vision is similar to your own, ultimately theyre bringing their personal >

If youre someone, on the other hand, whos indecisive and takes a long time to figure out what you like, a designer can actually end up saving you time and money. They can become someone who guides your decisions.

Some people love to make decisions and find that its easy for them to do so, and if youre that person, you could find it hard to work with a designer. On the other hand, if youre someone whos overwhelmed by choices, a designer can be well worth their fee.

You may find that a designer doesnt create a space you feel reflects who you are. A good designer will work with you to learn about your family, your priorities, and how you use spaces, but still they may not capture these elements as you would.

Are You Patient?

An interior designer can help you figure out the logistics of home design that you might not otherwise think about. They do tend to take their time with projects, however. Good design can take time, and designers will often carefully select items, and they may opt for custom pieces as well. If you want to work quickly, its unlikely a designer will be the best choice.

You might instead pick all of your items online or from a local store so that you can bring everything together at once rather than piece by piece.

For some people, hiring a designer is absolutely the best option. It makes things easier for them and helps ensure they get a beautiful and cohesive space. For other people, a lot of the fun of a home project or buying a new home is decorating it and personalizing the space, so you have to decide which category you fall into.

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What Should You Know About Buying a Starter Home?

You may hear the term starter home pretty frequently, but wonder as a buyer, what does that really mean?

When youre buying a home for the first time, you have to not only understand what a starter home is for you but also whether its best to skip ahead and invest in your forever home.

Whats Considered a Starter Home?

A starter home can be a single-family house, a condo, or a townhome. Starter homes are something the average first-timer buyer can afford but will likely outgrow. A starter home, >

These homes may be older, small, or generally modest. They might also be brand-new but still designed to meet the needs of entry-level buyers.

There arent going to be all the features you maybe hope to have someday, but you can envision that for the near-term future, a starter home will suit your life>

You may find that you stay in your starter home forever, for whatever reason. You might, on the other hand, move up eventually to a home thats in a more desirable neighborhood or is more expensive.

Whats a Forever Home?

A forever home is one that can be not just larger but may be updated or have more outdoor space. A forever home can have some of those features that are highly desirable and make a property competitive when it hits the market. It may have a big, private yard and be in a great school district, for example.

Of course, a forever home is subjective. For some people, that home may be one where they can envision raising a family. For others, a forever home might be a fixer-upper that needs some TLC but is in a great neighborhood.

A forever home doesnt have to be inherently luxurious, but one defining feature is that they tend to be bigger than a starter home.

The Benefits of a Starter Home

If youre at a point where you weigh whether you should buy a starter home or a forever home, both have pros and cons.

A starter home will be less expensive typically so you can save for a down payment faster. Then you can begin to build equity sooner as well. If you wait to afford a forever home, thats more time youre going to sink into rent and less youre investing in equity. When youre ready for your forever home, you can then use the equity youve gained to buy it.

The downside of a starter home is that youll likely outgrow it when you enter another phase in your life. For example, maybe youll get married or have kids, and a starter home will no longer meet your needs.

If you decide its time to move from your starter home, you have to sell or rent it. Youll have to find another home, get approved for another mortgage, and pay closing costs.

The Benefits of a Forever Home

If you think you might like to skip the starter home and go straight to your forever home, there are benefits. Theres a peace of mind that comes with knowing you plan to stay in your home for the long term without having to worry about selling it or moving.

You can take time to settle in and make the home perfect for your needs gradually.

The downside is that a forever home will probably be more expensive, meaning it takes longer to save a down payment and youre delaying building equity.

Which is Right For You?

The most important thing when youre buying a house, whether a starter or forever home, is to spend what you can genuinely afford. The general rule of thumb is to spend no more than 28 of your gross monthly income on anything >

If you shop for a forever home, it can be a good move in terms of taxes. When you sell a home too fast after buying it, you may have to pay a capital gains tax if the value goes up. Theres an exclusion of up to 250,000 if you file taxes individually or 500,000 if youre a married couple filing jointly for capital gains on real estate. You lose that exclusion if you own the home for less than two years.

Along with budget and tax benefits, think about the long-term value of a home before you buy one. You want to look for properties, no matter the price, have an excellent potential resale value. Sometimes you do also have to remember that what you think is forever right now might not really be forever.

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Assets and Your Mortgage Application: What to Know

When youre applying for a mortgage, you shouldnt underestimate the important role of including your assets. Making sure you list all your assets can affect the type of mortgage you get, as well as your interest rate.

When lenders are assessing applications for a home loan, they look at your credit score, debt and income, and also your total net worth. Your net worth is how much money you actually have. To calculate your net worth, the lender will subtract the debts you owe from your total assets. Your assets are >

Your lender will consider your assets to make a determination of how youd make your payments if you lost your job, for example, and whether you could float your expenses for a few months.

Below, we go into more detail about what you should know as far as assets and their role in the process of applying for a mortgage.

What Are Assets?

Assets are things you own with a monetary value.

We can usually group them into three broad categoriescash, cash equivalents, and property. Your total asset value will usually go up as you move through life. Your salary and income information are part of your mortgage application but arent an asset.

Cash and Cash Equivalents

Cash is anything you have on hand thats already liquid. For example, if you have money in a checking or savings account, this would be an asset. Cash equivalent assets might include what you have in certificate of deposits or money market accounts, for example.

Physical Assets

Your physical assets are things that theoretically if you needed to, you could sell for funds that you would then use to qualify for a home loan or make payments on it. This could include houses, cars, jewelry, art RVs or boats. If youre going to use a physical asset to qualify for a mortgage, you have to sell that asset before you close.

Nonphysical Assets

A nonphysical asset can include things you have that have value but arent liquid and dont have a physical presence. A house is a physical asset. An IRA or stocks are nonphysical assets. Yes, you can make them liquid, but theyre not immediately available.

Theres a fine line between nonphysical assets and liquid assets. A liquid asset can be converted into cash very quickly, so a stock you can trade and get cash from right away is a liquid asset. A nonphysical asset might be a retirement account, by contrast. Yes, you can get some money from it, but again, it can be more complicated to do so.

Fixed Assets

Fixed assets can include furniture and some types of real estate. The value can change over time, and you can sell them for cash, but it takes longer.

Equity Assets

If you have ownership in any businesses, like mutual funds, they can be equity assets.

As you might have noticed, there is often overlap in the categories of assets. Whats important is that you include an exhaustive list when you apply for a mortgage.

Which Assets Do Lenders See As Most Important?

In the eyes of a mortgage lender, cash and cash equivalent assets are most important. You could use these liquid assets quickly if you needed to pay your mortgage. Physical assets are also somewhat important to a lender.

If you have items like artwork that you arent sure of the value of, you may need to work with an appraiser.

Do Lenders Verify Your Assets?

Keep in mind that if you list any assets on your mortgage application, your lender will verify them and make sure everything you provide is correct. Your assets need to be traceable, and they need to be verifiable as your own.

As far as being traceable, if you have a big cash deposit in your account and theres no resource to trace it back to you, a lender might have questions.

If youre overwhelmed about including assets on your mortgage application, you might want to talk with a financial professional. They can help go over your assets and make sure there arent any red flags that would prevent you from being approved.

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Recruiting Directors In Your HOA

From time to time, it is necessary or desirable to recruit new directors. It may due to a vacancy or an upcoming election. Often volunteers are >

To All Members of Nottacare Condominium,

At the Annual Meeting, two positions for director of the board will be voted on. Anyone that is a owner in good standing current in HOA payments and no outstanding violations is eligible to run in this election.

Overview of Director Duties. The board has the authority to direct business including maintenance and financial oversight, rules enforcement and architectural design approval. The board has the authority to hire and oversee the professional management company.

The board meets four times a year for two hours to review business and to make decisions and enact policy. Between those meetings, there may be an occasion special meeting to deal with an urgent matter that cant wait for a regularly scheduled board meeting. The President has the authority to act on behalf of the board between meetings as long as the matter is authorized by the governing documents or in line with the approved budget.

Serving on the board gives you direct impact and influence on how HOA business is handled. While a management, financial or construction background is helpful, no special training is required other than the willingness and availability to serve. The office of director carries a term of three years.

All members have an obligation to serve in some capacity. We hope you will consider running for the board. You may be nominated by another owner or by yourself. If you are interested in being nominated, please email that desire and your contact information to or mail to Nottacare Condominum, 123 Easy St, Anytown USA by no later than April 1st. Please contact me if you have any questions.

Ima Daboss

President - Nottacare Condominum
Phone 666.666.6666

For more innovative homeowner association management strategies, see www.Regenesis.net.

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Buying near a "Christmas House"

A couple of weeks back, I talked about selling houses during the holidays when really serious buyers are out in force.

Since we bought our first house in the first week of January and sold it on Dec. 31, and bought our third house a week before Christmas, I thought I was standing on really firm ground in my recommendation.

That is, however, until my wife made me drive three blocks from my street to get a load of the "Christmas house."

Every gadget, gimmick and kind of light available on the market today covers this place from dusk to dawn and then some. Im absolutely certain that planes landing at the international airport across the river use it as a directional finder in foggy weather.

Christmas is not the only holiday that finds this house awash in decoration. The giant inflatable turkey that replaces the giant inflatable pumpkin the day after Halloween is replaced by the giant inflatable Santa Claus surrounded by enough fiber-optic animals to fill Albert Lea State Park in Minnesota.

Unfortunately, no wide open spaces exist between houses on this street, which means that how neighbors live is influenced heavily by blinding brightness and the perpetual ho-ho-ho-ing of the multiple Santas.

Im sure you are calling me a Grinch, and so be it. Although I do decorate my house for Christmas each year, we err on the side of minimalism and taste.

So, hes a snob, you are saying. Not really. I do, however, consider the sensibilities of my neighbors and the overall livability of the neighborhood, just as they do mine.

We celebrate the holidays, but the electric companys bottom line doesnt rise or fall on how we do it.

The owners of the Christmas house are exuberant about the holidays, for sure. But, as my wife suggests, how do sellers and agents trying to market a house on that street accommodate buyers who may not understand such exuberance?

There are probably as many people who would understand and who wouldnt, but in a slowing market with an increasing supply and declining demand, you dont want to play the numbers game.

Enthusiasm reflected by the decorations could be construed as "pushy" behavior in other matters. For example, if the neighbors see nothing wrong in imposing their "tastes" in decorations on others, what would stop them from running a gas mower at 7 a.m. every Sunday or repairing their cars in the driveway?

It comes down to location. People buy where they live and what they live in. It is sheer folly from a house-as-an-investment perspective to buy the nicest house around thats next door to a light show.

The few advantages -- eliminating the need to turn on your own indoor lights and saving money on electricity -- would be outweighed by the association of where you live and what is next door.

"Oh, you must live next to the Christmas house," people would say. "Ill bet it feels strange wearing sunglasses at night."

In their haste to buy, a lot of people often are willing get into potentially uncomfortable situations.

One fellow I know bought a house next door to a collector of old cars, and began to complain about "abandoned wrecks" after a few months.

When I reminded him that those "wrecks" were sitting in the neighbors front yard before my friend bought the house, he replied that he hadnt realized how much the cars would bother him.

You cant anticipate problems, no matter how much you wish you could. If you buy a house down the street from a new-home development in its first phase, you can assume that there will be more houses, dust and noise from construction and more people using your street.

Even if you buy in a "perfect" neighborhood, there is no guarantee that such perfection will endure forever. Thats if you are foolish enough to search for "perfection."

The owners of a house we once considered buying told us that we seemed to be people very much like them and exactly like everyone else in the neighborhood. We didnt run screaming from the house, but we went on to pick a neighborhood that reflected the diversity of where we had been living for six years, which was a block from a public housing project.

The housing-project neighborhood wasnt perfect by any stretch, but it wasnt as bad as everyone had led us to believe.

For some buyers, living near the Christmas house might be just the ticket.

Especially if they have a good supply of sunglasses.

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Buyer Beware: What You Need To Know About Warranty Companies

True story: Our four-year-old refrigerator died an ugly death late last year. After being diagnosed and fixedmore than onceby the same repair company, our warranty company finally authorized the purchase of a brand-new fridge.nbsp;

We were, frankly, pleasantly surprised by how easy the process was and also chalked it up to financial karma for having paid 60 every month for the last six years just to have the peace of mind of a warranty, plus 75 for each service call.nbsp;

Those calls were few and far between, save for an annual air-conditioning issue and the occasional other appliance/plumbing concern. To our very unpleasant surprise, the company canceled our existing deal when our contract ended. Apparently, we had made too many service calls. This was, of course, code for We had to replace your refrigerator and we need our 2,000 back.

We were invited to reinstate our coveragefor 2 times what we had been paying per month.

Welcome to the world of home warranties.nbsp;

The truth is, we had minimal problems in the six years leading up to our refrigerator replacement. The tradespeople were generally fine, the service was as expected, and the fixes were typically timely. Being dumped by our company and having to scramble for new coverage wasnt fun, but it definitely wasnt the worst that can happen with home warranties. If youve bought a new home and are considering whether you should renew your warranty after your initial period is over, or are buying/have bought an older home and are mulling a warranty, here are a few things to think about.

The cost

For many people, the fact that they can pay a small amount every month that protects them against a potentially huge expense like an air conditioning issue, provides peace of mind. But ask yourself this: Are you better off putting that 60 or so in an interest-bearing account and saving for a what-if?

Also, just because you have coverage doesnt mean everything will be taken care of by the company. Some problems wont be covered by the warranty, whether because the homeowner didnt purchase coverage for that item or because the warranty company doesnt offer coverage for that item, said Investopedia. Also, home warranties usually dont cover components that havent been properly maintained. Furthermore, if the warranty company denies a claim, the homeowner will still have to pay the service fee and will also be responsible for repair costs. In addition, warranties have numerous exclusions, as well as dollar limits per repair and per year.

The coverage

Many companies have tiered offerings and the lowest tier is just basic coverage. The cost of a home warranty ranges from 350 to 600 a yearmore if you want enhanced coverage for such things as washers and dryers, pools and septic systems, said Bankrate. In addition to the annual premium, expect to pay a fee for service callsanywhere from 50 to 125, depending on the type of contract you purchase.

The rules

Your ba>

Most major home warranty providers include air conditioning as one of their covered systems. In most cases, a home warranty company is going to do everything it can to repair an AC system before replacing it, said Consumer Affairs. Be sure to check your contract for fine print on what AC components may or may not be covered. Also check for the maximum coverage limit listed in your contract for AC units. Remember, you will be responsible for paying for any cost above this dollar amount if your AC needs to be replaced. If you know your home is at risk of needing repairs or replacement of costly items like an AC unit, its worth it to look for a provider that has a generous per item coverage limit.

Other options

Ask a friend, or give it a Google search and youll find lots of tales about frustrated and irritated homeowners ranging to horror stories about their home warranties. Ultimately, the choice is yours when it comes to opting for oneor not.

There are some other options you might want to explore before locking yourself into a contract. Before buying a home warranty, learn what coverage you may already have, said Money Talk News. For example, if youre buying a newly built home, know that: The home appliances and systems typically have one-year warranties. Most states require builders to warranty the homes structural elements for up to 10 years. Also, when you buy new furnishings and appliances, use a credit card that extends the products warranty. That can add as much as an extra year of protection.

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Can You Get a Mortgage with Bad Credit?

The real estate market remains hot right now, despite economic headwinds. Many people want to jump in and buy a home or upgrade their current home to a new one for good reason. Interest rates are incredibly low, so now could still be a buying opportunity, despite limited inventory and high prices in some locations.

If your credit isnt perfect, you may wonder if anyone will approve you for a mortgage. The short answer is maybe.

You arent alone if you dont have great credit. Around 15 of Americans have a credit score from 500 to 599, which is considered poor. Around 10 of people have credit in the range of 600 to 649, which is considered fair.

When youre applying for a mortgage, youre most likely to be approved with a score of at least 650, although even anywhere in the 600s can make it challenging. If your score is below 500, youre almost certainly not going to be approved for a mortgage, and beyond that, the following are key things to know.

Conventional Mortgages

Conventional mortgages tend to have the strictest requirements as far as your credit score. Freddie Mac and Fannie Mae are two companies offering conventional mortgages. Freddie Macs minimum credit score requirement is 660, with a down payment of 3. Fannie Maes minimum score for a 3 down payment is 620. If you make a down payment of at least 25, you may be eligible for a Freddie Mac conventional mortgage with a credit score as low as 620.

The majority of lenders follow similar requirements, because usually after your loan is closed, the lender will sell it to Freddie Mac or Fannie Mae.

You should be aware that in the eyes of your lender, theres a difference between having a low score because you dont have much credit history and having a low score because of bad credit history. Youre likely to be viewed more favorably with limited credit than with bad credit.

If youre close to the lending cut-off, you should be able to show that you have a debt-to-income ratio of no more than 36. You will probably also need to show that you have at least two months of cash reserves on hand.

What About an FHA Loan?

An FHA loan may be an option for someone with a very low credit score. You can be approved for these loans with a score as low as 500, but youll have to plan to put at least 10 down.

If you have a higher score, you may be able to put as little as 3.5 down.

Aside from VA loans, FHA loans have the least stringent approval guidelines.

As such, FHA loans are often used by people after a foreclosure or bankruptcy.

FHA lenders dont have to follow the above credit score requirements. They can require that your credit score is higher for approval. Many FHA borrowers have a score somewhere between 650 and 699.

VA Loans

For a VA loan, there is no minimum credit score, but you can only get this type of home loan if youre an eligible service member in the military, a veteran, or the surviving spouse of a veteran. While theres no set minimum score, individual lenders can create their own guidelines.

Should You Focus on Improving Your Score?

If you have less-than-perfect credit right now, you might want to focus on building your score. It can take several months, but its very unlikely interest rates will go up anytime soon based on what the Fed has said so far. The Fed says they expect rates will stay around zero through 2021 and maybe 2022, although theres no guarantee.

If you can make even modest improvements in your credit score, not only are you likely to be approved, but you may also get better terms. Focus on paying down your high-balance credit cards, cleaning up any errors, and in the meantime, also try to save for a down payment. If you have at least 10 for a down payment, a lender will see you as less risky.

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Seven Steps to Take to Prepare Your House to Sell in the New Year

The holidays are a wrap, and with the coming of the new year, many people are starting to make their new years resolutions. If selling your home is one of those resolutions, its beneficial to take steps now to prepare your house to sell in the new year. Getting a jump start on this preparation can help your home be ready for the spring/summer homebuying season, an annual tradition that typically sees an increase in buyer demand.

Preparing a house for sale in the new year involves more than taking down the holiday decorations. Some of the key steps to take before putting your home on the market in the new year include:

1. Decide on a listing date

One of the first steps is to decide when you want to put your house on the market and create a timeline for all the tasks that need to be completed before this happens. Work backward from the listing date to establish deadlines for each task. Establishing these deadlines can be a great motivator for getting all of the to dos done in order to showcase your house to its best advantage.

2. Hire a REALTOR

A REALTOR will guide you through the selling process and provide a plan for attracting potential buyers to get your house sold for the best possible price. REALTORS have reams of data and calculators at their fingertips to help you make the most strategic choices when selling your house.nbsp;

3. Give the house a deep clean

Deep cleaning goes beyond vacuuming and dusting. Giving your home a deep clean means getting carpets steam cleaned, mopping floors, cleaning windows inside and out, washing walls to remove stains and scrubbing bathrooms. Consider using professional carpet cleaning and maid services to really make your house sparkle and shine.

4. Get rid of all the clutter

De-cluttering will make your house seem more spacious and make it easier for potential buyers to envision themselves in the house. Start the de-cluttering process by cleaning out closets, cabinets, and garages. Donate clothing and other items of use and throw out items that are broken or cannot be used.

5. Make needed repairs and updates

Leaky faucets, chipped paint, running toilets, and squeaky doors may seem minor but really signal to potential buyers that your home has not been well maintained. To help attract buyers and get top dollar for your home, take the time to make needed minor repairs and consider updates such as repainting rooms with neutral paint colors, replacing worn carpeting, and modernizing bathroom and lighting fixtures.nbsp;

6. Spruce up curb appeal

Sprucing up the curb appeal of your home is an important step to take before putting it on the market. In fact, among REALTORS, 94 have suggested sellers improve their curb appeal before listing a home for sale. This recommendation is so common simply because the outside of your home is the first thing buyers see when they pull up to the curb and as the saying goes - you never get a second chance to make a first impression. Painting or replacing the front door, keeping the lawn mowed and weeded, trimming overgrown shrubs and trees, and repairing cracked walkways are just a few things that can go a long way to sprucing up the curb appeal of your home.

7. Stage it to sell

Staging your home can show it in its best light. The National Association of REALTORS Profile of Home Staging found that 40 of buyers agents cited that home staging had an effect on most buyers view of the home, and 83 of buyers agents said staging a home made it easier for a buyer to visualize the property as a future home. Staging a house can involve things like adjusting furniture layouts to make rooms appear larger, repainting rooms, opening curtains and blinds to let light in and adding extras like fresh flowers in vases, a bowl of fruit in the kitchen and folded towels in the bathrooms.

If selling your house is on your list of New Years resolutions, make sure to take the steps outlined above to get it ready to sell. This preparation can help your house stand out among the millions of homes nationwide projected to sell in the new year.

---

Jeffrey M. Fagannbsp;is the 2019 president of the Orlando Regional REALTOR Association and is regional vicenbsp;president of Watson Realty Corp.

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The Biggest Challenges House Flippers Face

There tends to be a glamorization of house flipping, likely brought about by watching home improvement and real estate shows. The reality is that house flipping can be a difficult and often disappointing undertaking. Thats not to say some house flippers dont find great success, but there are also so many challenges that can come along too.

If youre considering wading into the flipping world, when youre realistic about the challenges, youre already putting yourself in a better position to deal with them.

The following are some of the most significant challenges you might face along the way if you flip a property.

Finding the Right Property

Many homes are not a good investment in terms of flipping. You have to find neighborhoods that will appeal to buyers, but you need properties that are going to be priced below market value in that area. Your goal with flipping isnt to let the property appreciate slowlyits to sell quickly.

Some of the ways you can gain leads for properties well-suited to flipping include looking for probate properties, going to auctions or keeping up with foreclosure lists. Tax lien properties, wholesale properties, and short sales are other options.

You need to do the math before bidding on a property to know the highest price you can pay and still make a profit.

With each home you buy you have to think about the propertys actual value, current conditions of the market, comparable home prices, and how much you think itll cost you to make repairs and upgrades. These considerations have to be weighed against the possible listing price.

Funding

Some flippers can pay cash for properties, but if you cant, it can automatically put you at a disadvantage. That doesnt mean you cant work around this, but its something to be mindful of. For real estate investors, its not uncommon for mortgage lenders to want a significant down payment of 25 or more.

Youll also have to come up with the cash to do the work on the property, pay contractors, maintain the utility bills, and cover closing costs.

Along with planning for everything above, youre going to need a contingency to tap into if things dont go according to plan, which is almost inevitable.

You may be able to use equity from a rental property you already own or get an investor for private funding. Otherwise, your two primary options are a traditional lender or using your own cash, both of which have risks.

Delays

When youre an investor, and you experience delays on a project, it can be incredibly frustrating. Your contractors may have other jobs theyre working on, materials might not arrive on time, or machines and equipment might break down.

Once theres one delay, it often creates a ripple effect.

To avoid some of the impacts of delays, you shouldnt >

Unforeseen Expenses

Above, we mentioned the importance of having a contingency cushion built into your budget, and the chances are very high youre going to tap into it when youre flipping a house.

You might not have known there was mold behind a wall, or a pipe in the wall could burst unexpectedly. Weather and delays can also contribute to expenses you didnt initially account for.

The best you can do to plan for the unexpected is to try to budget for them ahead of time.

Not Understanding the Market

Finally, when youre a house flipper, you absolutely have to understand the market, and its not easy. It takes time, experience and research to grasp whats happening in the market at any given time. Many new flippers just dont get it but they jump in any way.

Its not always the prime time to start a new project. For example, demand might be down, or mortgage rates could be high. There can also be external issues in the local area where you are.

You cant just consider the trends when youre already entrenched in them. A good flipper is ahead of the trends, and you can time your purchases and flips accordingly. Factors to understand include local house inventory levels, trends in mortgage rates, and property values.

If youre lucky, youll find an experienced local realtor who can help you a lot as far as understanding local housing conditions.

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