What You Need To Know About The Homebuyer Tax Credit

Posted at 10:53 AM, Nov. 14, 2009

 

There is good news and bad news about the Federal Housing Extended Homebuyer Tax Credit. 

FHA Allowable Down Payment “Loan” Options In Place of Discontinued Down Payment Assistance Programs

Posted at 3:13 AM, Aug. 25, 2008

 

The (FHA) recently changed its guidelines in response to the Economic and Housing Recovery Act of 2008. A very significant change of the Act was the elimination of the seller-funded down payment assistance program. This option was often used by builders and other willing sellers through non-profit organizations such as Nehemiah and AmeriDream, this program enabled the seller of a property (either an individual or a builder) to “donate” an amount equal to the funds needed by a buyer for a down payment on a home when securing FHA financing.

Effective October 1, 2008, the FHA will no longer allow sell assited down payments.  Not only that, but FHA has actually increased the down payment requirement from 3% to 3.5% which could be a real setback for those who want an FHA loan and are already having problems coming up with the money to save to close on a home. 

Fortunately, these is another option that can bring these buyers a little closer to home:  "family" loans.  This feature is unique to FHA, and while it is not allowable on other types of loans, it IS for FHA, and allows buyers to borrow the down payment from family members. But to obtain a family loan, there are specific requirements:    1) the family member can be a aprent, grandparent, son, daughter, stepson, stepdaughter, or a legally adopted child or foster child. 2) The term of the loan cannot be less than 5 years (although it CAN be paid back in les than 5 years). 3) The FHA loan and family loan combined cannot be greater than 100% of the value of the home. 4) The scheduled loan payments, if any, must be factored into the borrower's debt ratios. 5) Funds cannot be directlly or indirectly be associated with the seller or anyone in the transaction who has a financial interest in the sale.

Of course, the lender will still want to verify the source of all funds to close the transaction, so be prepared to provide a copy of the loan agreement that spells out the terms and verifies that the relative has sufficient funds available to make the loan. 

 

 

 

 

 

Housing Bill: What It Means to Buyers & Sellers

Posted at 9:28 AM, Jul. 30, 2008

The housing bill being signed by the President today was designed to help the ailing housing market.  There is a little bit of everything in this bill not all of it good but most of it good for the big banks and lenders who have bad loans on the books.

Homeowners in Distress
The bill would help approximately 400,000 homeowners avoid foreclosure by allowing them to refinance into lower-cost mortgages insured by FHA. The borrowers must have a relatively high level of debt to income; their homes must be their primary residences they must agree to share any profits from any eventual resale with the government. The lenders must agree to write down the loan principals. The positive to this is that some homeowners may be able to avoid foreclosure, but, with any kind of loan or financing, they are still going to have to qualify for the new loan.  The downside is that they must share a portion of any future profit upon resale. 

First Time Buyers
With the lower housing prices, many first time buyers who could not qualify for a mortgage before now have a better chance of getting into their first home.  First-time home buyers who purchase a primary residence between April 9, 2008, and July 1, 2009, will be eligible for a tax credit of $7,500 or 10% of the purchase price, whichever is less.  While this doesn't provide a buyer with much needed down payment money, it does provide them with a nice tax deduction.

You'll have to pay it back. While this break has been labeled a tax credit, it's really an interest-free loan. Home buyers who claim the credit will be required to pay it back in equal installments over 15 years, starting in the second year after the home is purchased. If you buy a house this year and claim a $7,500 credit on your 2008 tax return, you'll have to pay an additional $500 a year in taxes for 15 years, starting in 2010.

Down payment assistance programs are being phased out with this new bill and will no longer be available after October 1st.  However, there are still ways for sellers to help buyers with contributions to closing costs, up to 6% with FHA loans.

Banks and Mortgages
The banks and mortgage lenders may have one of the best outcomes because they can relieve themselves of a fair amount of bad debt by letting them be financed by FHA, resulting in them having more money to lend.  What these institutions will need to be careful of is falling back into reckless lending

Sellers
What this bill may mean to sellers who are not in distress is that there may be more buyers coming into the market as a result of the first time buyer incentive and, as a side effect of the perhaps more money being freed up for mortgages.

And, while there may be more money available, sellers must still be realistic about the market and price their homes accordingly.  Their homes have to be in very good condition up to and including freshening up with a new coat of paint, fixing those "Ill get around to it one day" items and giving the home the best possible curb appeal.  It's amazing what power washing a deck, keeping the lawn trimmed, and colorful plants can do to improve the desirability of the house.

 

 

 

First Time Buyers And Others - Where Do I Get The Down Payment?

Posted at 3:50 AM, Jul. 14, 2008

Many prospective buyers are ready to get into the housing market but wonder how they can come up with the down payments that lenders require. 

 

Depending upon the type of loan, a home mortgage typically requires anywhere from 3% down for an FHA or VHDA loan or 5 percent down for a conventional loan.   If you have the money, then you’re set. But what if you don’t?  What if you’re renting? You can afford a mortgage within your budget, but coming up with the down payment money needed to begin the transaction can be challenging. So, where can you turn?

 

One of the most overlooked sources of down payment funds is likely right under your nose—in the form grant programs.  These programs either provide outright monetary grants for down payment or money to buyers in the form of a forgivable loan. 

 

Recently there was an article in The Richmond Times Dispatch about a Workforce Housing project where Virginia Commonwealth University Health Systems helped one of its employees buy a home using the "forgivable loan" process for the $5000 down payment.  In essence, VCU helped her buy the home and she would not have to pay it back if she kept the property for a certain number of years.  The City of Richmond has a similar program for qualifying employees.

 

So, what if you don't work for VCU or the City of Richmond?  Take heart, because unless or until the federal government bans down payment assistance grants, a home buyer can get this help with the combined efforts of a non-profit down payment assistance program such as Nehemiah and Seller contributions.

 

In the past it was challenging to find these special programs, but now all you need is your agent or your lender, and you will find the programs that may just be the answer to your down payment quanadary and the way to open the door to home ownership.

Buyers Can Still Buy, Sellers Can Still Sell

Posted at 11:36 AM, Jun. 24, 2008

Where to go, what to do, who to believe?  These are questions that buyers AND sellers are asking today.  There is an inordinate amount of media attention to the housing market.   Depending on what day of the week and what cable or network channel or what media is expounding on the topic, the opinions can be as varied as the weather and often in opposition to one another.

So, now what?  Well, it's really quite simple.  Buyers can STILL get mortgages, often with as little as 3% down payment, sometimes even less with Seller contributions.  FHA loans are readily available to Buyers with reasonably good credit and a decent ratio of debt to income.  Conventional loans may have different criteria but still available to credit worthy Buyers.  The difference is that the down payment requirement is at least 10%.    If the Buyer stays in the home for 5-7 years, it will most certainly be a very good investment with a very good return.  The truth is: BUYERS CAN STILL BUY in today's market.

What about our beleaguered Sellers?  Gone are the days when a Seller can overprice a home with the intent of either "testing" the market or in the hopes of receiving multiple offers.  I think, for the most part, we've seen the end of those overheated days.  So, what is a Seller to do? 

First, the Seller has to be realistic and accept the market for what it is.  This IS a Buyer's Market because there are hundreds and hundreds of homes for sale in any particular price range.  The house must be in pristine condition, inside and out.  It must be in "showing condition" at all times.  Those bothersome repairs you've been putting off should be done NOW.  In fact, it's a very good idea to get a pre-listing Home Inspection to uncover issues that a Buyer is sure to find with the Buyer's Home Inspection.  Sellers who take this preemptive action to identify and resolve these issues are more likely to get top dollar for their home. 

Finally, the Seller has to let go of the past and disregard what the sales prices were even as recently as 6 months ago.  The market is changing frequently and the comparable sales of a year or 6 months ago are no longer the best barometer.  The truth is:  A house is worth what a Buyer is willing to pay for it.  The Seller should reflect on what the competition is in the neighborhood or price range and, to get an acceptable price in a reasonable amount of time, use the strategy of pricing the house slightly less than the highest priced home currently on the market.  The truth is:  SELLERS CAN STILL SELL in today's market.  It just takes a reasonable approach and a fair amount of patience.

So, Go Get Em!

Rates creep up

Posted at 10:11 AM, Jun. 16, 2008

Recent indication is that first time home buyers are getting tired of sitting on the sidelines. According to a recent online poll taken by the National Apartment Association, 17 percent of renters plan to make the jump to home ownership in the next year; 41 percent of the 2,041 respondents planned to be home owners within two years. Only 31 percent planned to still be paying rent five years from now.

Another factor that could very soon contribute to an increase in home buying could be rising mortgage costs. Fixed-rate mortgage rates rose to 6.32 percent, the highest it has been since October. After months of aggressively dropping interest rates, many lenders are worried that the Fed will be forced to raise rates back up. As interest rates rise, so do mortgage rates. According to a press release on freddiemac.com, Frank Nothaft, Freddie Mac vice president and chief economist said that, "Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman [Ben] Bernanke and Vice Chair [Donald] Kohn, expressed concern over a threat of inflation." We may very well be seeing the beginning of the end of the super-low mortgage and potential buyers may realize that with rising rates, now may be the time to jump in. Nothaft added, "Moreover, pending home sales for April unexpectedly rose by 6.3% and mortgage applications for home purchases ... were also up last week."

Jumbo Mortgages - What Are They? How Can We Work With Them?

Posted at 7:41 PM, May. 26, 2008

Anyone in a price range over $400,000 is probably aware that the jumbo loan market has been out of whack for nearly 18 months.  “Jumbo” loans, those amounting to more than $417,000, were significantly affected  when mortgage investors stopped buying subprime and alternative loans.  As a result, jumbo rates can be as much as 1.50 percent higher than conforming rates. Historically, jumbo rates were only about a quarter of a percent higher than a conforming rate, but this new spread has kept many out of the housing market.

So what exactly is “just jumbo?” It’s a loan amount that just exceeds the conforming limit of $417,000 and typically reflects a sales price in the $500,000­­–$600,000 range. In the Richmond Metropolitan area we have a number homes and communities in this price category, and the significant difference in rate from conforming to jumbo is slowing down sales. What is the difference in payment between a conforming loan at 6 percent and a jumbo loan at 7.50 percent? On a $500,000 jumbo loan, mortgage payments jump from $2,997 to $3,496 a month. That’s almost $500 more!

Fortunately, with some changes in strategy, a major dent in that increase in payment can be mitigated by buying a property with two loans — a first mortgage and a second. With the first mortgage at or below the conforming limit, the second mortgage then eliminates the need for private mortgage insurance, or PMI. And still, with only 10 percent down on a $500,000 sale.

For example, let’s say we have a sales price of $500,000 and you put 10 percent down. With a jumbo loan at 7.50 percent, the monthly payment on a 30-year note is $3,146 plus a PMI payment of about $188, for a total of $3,334. Using a 40 percent debt ratio means that you need to make about $9,700 per month to qualify.

Now, let’s make the first mortgage for $400,000 at 6 percent (conforming) with a second mortgage at 7 percent on a $50,000, 30-year note. The mortgage payments would be $2,398 and $332 respectively, for a combined total of $2,730. That’s a savings of over $600 per month, and now the income to qualify is almost $1,500 less at $8,200 per month! Do you think that has an impact on affordabilty? I do.

Here's another idea: In some cases, sellers may be in a position to carry back that second note to provide some additional income, providing an even better second rate for the buyer!

Just food for thought in this ever changing market......

Interest Rates "Hikes" and Impact On Your Monthly Payment

Posted at 3:43 AM, May. 12, 2008

The Fed did this! The Fed did that! Rates are up! Rates are down! Aaaagggh! Okay, now exhale.  In turbulent economic times the media can’t wait to report what interest rates are doing.  Pundits prognosticate, forecasters forecast and soothsayers sooth.  When should you buy a home based upon interest rates and when is it the right time?

The fact is that interest rates, while important, have little impact when it comes to buying a home.  Alright, alright, I’ll admit: it’s important…but it’s not a deal-killer.

There is a fixation on what rates are doing.  A fixation on what rates will be in the future and what rates were in the past.  I’ve heard potential home buyers tell me, “I’m not sure I want to buy now because of where rates are and I think I’ll wait.” I say,  “Wait for what?”  I say let’s not look at the rate but instead concentrate on what that rate actually represents … your monthly payment.

Let’s look at what an interest rate move of ¼ percent really does to a $200,000 mortgage.  Let's say a 30-year interest rate at 6.00 % “jumps” to 6 ¼ %.  Should you sit on the sidelines, thinking such a move is suddenly unaffordable?  No.  The payment on a $200,000 loan “jumps” by about $32 a month!

Now let’s get a bit more drastic and look at a ½ percent increase and the monthly payment increases by $64.  Putting that into daily financial terms, $64 is about a tank of gas. While not insignificant, it’s hardly a reason to stay on the sidelines of home ownership. Right now, buyers should have more urgency than ever. Home prices have declined enough to make buying more affordable than it's been in recent memory and interest rates (whether at 6 percent or 6 1/4 percent) are historically low. It's time to act.

Are rates important? Sure they are.  But are they the end-all?  Heck no.  Interest rates over the past few years have been in a very tight range, with few major swings.  Just remember what interest rates represent, your monthly payment, and pay less attention to the headlines.

Financing Solutions

Posted at 2:33 AM, May. 5, 2008

David Reed, a prominent mortgage professional talks about the state of financing. In essence, what he says is that there IS money available to make loans despite what you read and hear about in the media.  You’ve watched the news and read about it in the papers. You know, the “credit crisis” and how buyers need 20 percent down in order to buy a home? And even if you found a buyer with 20 percent down, lenders aren’t making loans anyway. So, why bother, right? Wrong!

We’re right smack in the middle of what just might be the biggest disservice ever perpetrated on potential home buyers.  It seems the press just can’t get enough of all the gloom and doom in the housing industry.  The fact is that mortgage money is as available today as it was a year ago and loans are being made this very moment with little or no money down. And, no, platinum credit isn’t required.  You just need to know where to look.  Who are these lenders? They’re right down the street.

Federal Housing Administration (FHA) loans are exploding onto the mortgage scene; recent estimates are that one out of five mortgages are FHA loans. FHA loans never went away, their reemergence is a result of the collapse of the sub-prime market. FHA doesn’t technically have a minimum credit score, although, in practice, lenders won’t approve an FHA loan with a credit score below 500. But that’s a far cry from the notion that an 800 score is the only thing lenders care about.

The best part?  FHA only requires 3 percent down. 3 percent. And that 3 percent can come in the form of a gift or grant.  FHA borrowers only need to have $500 in a transaction.  All the while, FHA mortgage rates are as good or better than their conventional counterparts.

Low or no down payment, extremely competitive rates and easier qualifying.  No wonder FHA is moving up the charts!

Please contact me at Deb@RichmondHomes4You.com or by phone on 804 314-4575 if you would like more information about FHA loans, helping you to find a home, and getting financed for the purchase. Don't forget to visit my website www.RichmondHomes4You.com to search for available properties in the Richmond Metropolitan Area.

 

Being Realistic In A Changing Market

Posted at 4:01 AM, Apr. 7, 2008

In my last entry I talked about how the news we hear on an almost daily basis would make it seem like "sky is falling" in terms of the real estate market. I've said often that it is still possible to enjoy the benefits of home ownership even in these fluctuating markets and I've also suggested that buyers who are waiting on the sidelines trying to time the market can find that strategy may backfire. The point I continue to make is that if you are looking for a "home" and not just an investment, the time to buy is NOW. In this market where there is a high inventory of homes, there are deals to be made. But, please, don't be unrealistic about the depth of those discounts and don't underestimate the Seller's willingness to "tough it out." Sellers have to be realistic. This is NOT the market it was two years ago where a Seller could overprice a home and buyers would fall all over themselves to bid on the property, often with multiple offers on one property. While those days were exhilarating, they were really not "reasonable" and now we've all come back to earth to a "normalized" market. For some homeowners, the difficulty arises if they have to sell before any equity has been built up in the property. While this is unfortunate, if the homeowner "has" to sell (job relocation, divorce, interest rate re-sets, etc.), they must price the home to the market if they want to sell it quickly. If they try to price it higher in order to make a profit or break even, they will most likely lose more in the long run because today's buyers are very savvy and along with their Realtors, they do their research and they know what to pay.

Now, here is some housing news from last week. The Senate agreed in principle to a $15 billion housing stimulus package that could pass as early as this week. Some of the highlights:

• A property-tax deduction for homeowners who don't itemize.
• FHA insurance up to $550,000. $100 million for counseling borrowers on the verge of default.
• A tax credit for buyers of foreclosed homes.
• A law has been passed that extends until 2010 the tax deduction for mortgage insurance (MI) premiums. Borrowers with adjusted gross incomes of $100,000 or less can deduct 100% of these premiums. The deduction continues on a sliding scale up to $110,000. This legislation makes Mortgage Insurance another option for borrowers to consider in today's market.

The Sky Is NOT Falling!

Posted at 3:33 AM, Mar. 10, 2008

While we continue to hear "bad" news about the economy, it's important to remember that all real estate is local.  We are bombarded day in and day out about the state of the economy, the rising foreclosure rates, rising unemployment, and rising delinquencies in other consumer debt.  I expect to see Chicken Little on the evening news proclaiming "The sky is falling! The sky is falling!"  Well, no, it is not.

To be sure, the economy is not as heated as it was just 2 years ago.  That is actually good news.  There are often very great gains that follow periods of slow or stagnant growth.  If you recall, several years ago, the pundits were forecasting the end of the dot.com markets.  Yes, those stocks and companies did take some hits only to rebound with even greater gains.

The real estate market goes through similar peaks and valleys.  If you take to heart everything you hear and read you might assume that the Richmond Area is experiencing a downturn.  It isn't.  The market is merely balancing itself.  For the most part, resale values are holding steady with only the slightest decreases in average sales prices.  There are good values to be found for buyers.  Sellers can feel assured that if their homes are priced right for the home's condition and the existing market, these homes can sell at very good prices in a reasonable amount of time.

On Thursday, the Department of Housing and Urban Development published new conforming loan limits that take them above $417,000, to a maximum of $729,750, depending on the median home price in a market. HUD also implemented temporary increases in FHA loan limits. Based on the area's median home price in the Richmond Area the new conforming limit has risen to $528,750.  These new limits should encourage buyers who were concerned about the higher "jumbo" rates.  In addition, existing home loans can be refinanced up to the new limits.   It's important to remember, though, that these new loan limits expire at the end of 2008.

So, what are you waiting for?  If you want to sell, then get your house in "ready for market" condition, and get it on the market now.  If you want to buy, get your credit in shape, call a lender to obtain a pre-approval letter, and start shopping!

If You Delay Buying Now You May Pay The Price Later

Posted at 2:01 AM, Mar. 3, 2008

 

While it is possible that home prices could drop, in the Richmond Metropolitan Area, we are much less affected by the current downturn than in the rest of the state or the rest of the country, even in the face of home sales being down over the same period in 2007;.  It is more conceivable that any decreased prices will more likely be accompanied by increased financing costs due to rate cuts by the Fed. Yes, that's right - when the Fed drops rates, sometimes, and often. mortgage rates actually go UP.  What this could mean to prospective buyers is that any money they think they are "saving" on paying "less" for a home by waiting a few months will be offset by the buyers ending up with a higher interest mortgage rate making “playing the waiting game” or "timing the market" a useless endeavor.

This rate increase isn’t just speculation. Just a couple of weeks ago, in early February, the fixed mortgage rate jumped a full half-percent, making it the fastest rate increase in 20 years.

The data below based on a recent Time Magazine article demonstrates how even as home prices may drop, monthly mortgage payments basically stay the same; due to increased interest rates:

Scenario 1:
Prices decrease by 5% and interest rates increase by 0.5%

Scenario 2:
Prices decrease by 10% and interest rates increase by 1.0%
Today Scenario 1 Scenario 2
Home Price
$218, 900 Home Price: -5%
$207,955 Home Price: -10%
$197,010
Interest Rates
6.04% Interest Rates: +0.5%
6.54% Interest Rates: +1.0%
7.04%
Monthly Payment
$1,054 Monthly Payment
$1,056 Monthly Payment
$1,053
Table: Kadlec, Dan. "Ignore the Headlines!" Time 25 February 2008

The moral of the story???  Waiting to buy does not guarantee that you have made a better investment.  A rise in interest rates can erase any advantage you might have gained by waiting.  Remember, real estate is a long term investment.

Fed Lowers Rate Again - Now Is Time to BUY!!!

Posted at 10:42 AM, Jan. 22, 2008

Real estate professionals, mortgage lenders, buyers and sellers should be jumping for joy and spreading the word about the latest Fed rate cut. Last night, the Fed cut rates by .75% and will probably make another cut of .50% when they meet again on the 29th. 

As Ben Borden of Virginia Mortgage Bankers, LLC notes in his latest blog entry, homeowners with HELOCs should see a reduction in their rate by .75% and their should be declines in other rates such as LIBOR, MTA, and CMT.   And, we may even see 30 year mortgage rates close to 5%.  GREAT NEWS!

 

Richmond Real Estate - The Sky is NOT Falling!

Posted at 7:25 AM, Nov. 27, 2007

Media reports and articles to the contrary, the sky is NOT falling in regard to the housing market in the Richmond Metropolitan Area. What the news HAS gotten right is that our average values have not dropped like in other parts of the state or country and it is taking longer to sell than it has in years past. Can Sellers can get the high, and some would say, inflated prices, of the last few years? No, those days are gone (for now). Does it mean that Buyers can name their price? No, but there are good and even some great deals offered by motivated sellers. SELLERS: Are you serious about selling now or are you just "testing the market?". If you are serious, with an ever increasing inventory of homes on the market, and more to come in early spring, then price, terms, and condition of your home are crucial to getting it sold in a time period you can live with. It means that you cannot rely on "what used to be" or what homes sold for last year or even earlier this year. That ship has sailed. You have to price your home according the current market and be mindful of your competition. BUYERS: Should you wait? Why would you? If you try to time the market, chances are you will not win that gamble. If you want to, can afford to, and have the means to buy now, then do so. If you plan to stay in your new home for 5 to 7 years you will be happy to find that you will have made a wise purchase and will see a terrific return on your investment. Interest rates are very favorable right now and may even dip below 6%. An article in Inman News today, talks about just that possibility. There are still many affordable financing options for buyers in the market of today, and, in some cases, motivated Sellers can help to make those options even more affordable. Finally, homes that are in good condition and priced right will sell quickly. If you wait, you may end up with choices of "what is left" which may be homes that are not priced right and are not is in as good condition. More to follow……

Relief on the way�.Help for Buyers AND Sellers

Posted at 4:10 AM, Sep. 20, 2007

With the Fed’s action to reduce interest rates by ½ percent, there is hope that there is an answer to the current crisis affecting many prospective home buyers, homeowners hoping to refinance into more affordable mortgages, those interested in getting home equity lines of credit, and, homeowners facing foreclosure.

Be aware, however, that the Fed’s rate cut of ½ per cent does not necessarily equate to a ½ per cent decrease in mortgage interest rates but these Fed cuts usually do put pressure on rates bringing them down incrementally. In fact, mortgage rates have already been dropping over the last several weeks, perhaps in anticipation of the Fed’s actions.

The new FHASecure program proposed by the Bush administration, which allows FHA to guarantee refinance loans for delinquent borrowers facing interest-rate resets, and risk-based pricing, will allow the FHA to assist up to 700,000 borrowers in the next two years or 240,000 in the remainder of the fiscal year.

As FHA Reforms move forward, if the House and Senate can come to agreement, more buyers can enter the market with no down payment. Under existing FHA guidelines buyers must make a minimum 3% down payment.

The Bush administration says it supports boosting FHA loan limits from $362,000 in high-cost areas to $417,000 and from $200,000 in lower-cost areas to $271,000. Allowing the FHA to back bigger loans would detract from its mission of serving low- and moderate-income families, the administration maintains.

The impact of these changes which will get more buyers into the market can help sellers whose homes are staying on the market because of a diminishing pool of qualified buyers.

 

Fall Maintenance

Posted at 6:41 AM, Sep. 10, 2007

 Although the Richmond area is not known for very cold or snowy winters, it is still a good idea to prepare for seasonal changes. The following are just a few items that may need your attention.

Indoor Maintenance

Furnace/HVAC Maintenance:   The efficiency of your furnace and air conditioning units, compressors, or air handlers can be affected by any number of factors such as ducts that need cleaning, air filters that need to be changed, etc.  Now is the time to have a professional perform a general maintenance check up.

Don’t forget smoke detectors: It used to be that we were reminded to check batteries in smoke detectors when the time changed back to Standard Time around Halloween.  However in 2007 instead of the end of October, it will be the first Sunday of November.  For more information on safety codes,

So, take some time right now to check the operation of detectors and to change the batteries.   Many localities require a smoke alarm either in or outside each bedroom and on each level so be sure you are in compliance.

Install a carbon monoxide detector:  While you’re at it, you should consider installing a carbon monoxide detector as well, particularly if you have gas appliances, gas furnace, gas water heater, a gas fireplace, or even a wood burning stove or fireplace.  Carbon monoxide is a silent, deadly killer.   More information about carbon monoxide can be found at LowesMoving.com: Safety First: Carbon Monoxide Detector

Get your fireplace cleaned and/or inspected.  Fireplaces can accumulate a build up of soot and creosote which can cause chimney fires if not regularly removed.  You can clean your fireplace yourself but why not have a professional do it and keep all that soot and ash off your hands and living space!  But be careful of chimney sweeps.  Some of them are less than reliable and some have been known to be dishonest.  For your protections, you may want to check the company out first by going to the Better Business Bureau of Central Virginia . 

Outside Maintenance

Check for leaks around doors and windows. When you overlook gaps and spaces around doors and windows you may experience a loss of energy efficiency because heat in the winter and cooling in the summer just seeps out causing your heating and cooking systems to work harder.  Another place where you can lose efficiency is around the outlets and light switches on outside walls.  You can buy foam insulation for these switch plates at any local hardware store.  More information about .winterizing the home can be found at LowesMoving.com: Improvements: VirginiaStaying Warm in Your Home

Clean gutters.   If you don’t have gutter guards or screens then it’s time to clean your gutters of leaves and debris.  Be sure to be sure that the opening between the gutter and the downspout is not blocked.  

 

Buyers and Sellers - Time to Get Off the Fence

Posted at 8:23 AM, Aug. 10, 2007

 

It seems that almost every day for the last few weeks, the news about the chaos created by the sub prime market mess has been more and more despairing.

How bad is it? Well, thank goodness it isn’t as bad as in the 80’s when interest rates shot up to the mid to high teens; but, there is no question that getting the funds to purchase a home has gotten more difficult. Quickly receding are the days when a bank or Mortgage Company would lend 100%. Even 5% and 10% down loans are more difficult to qualify for and those that do qualify have to pay a premium interest rate. Let’s face it, the more risk or perceived risk that a lender sees the higher the interest rate will be and the more stringent underwriting criteria the purchaser will have to meet.

SELLERS: If you are a home seller, you will find that the pool of qualified buyers is shrinking because buyers may now qualify for less than they qualified for just a few short months ago. To the seller who has been digging in his or her heels regarding the asking price of their home, it’s time for a reality check. Do you want to be stubborn about what you think your house is "worth" or do you actually want to sell it? Don’t get caught up in that madness and pay the price of having to settle for a whole lot less when months go by with no offers and desperation sets in. And, if you’re a For Sale By Owner seller, don’t underestimate how buyers are going to lowball you even more than buyers have in the past.

BUYERS: If you are a home buyer, it’s time to fish or cut bait. Don’t make the mistake of thinking that the buyer’s market is going to favor you interminably. It’s true that buyers do somewhat have the upper hand when it comes time to negotiate price and terms, but, if you’re playing the waiting game, hoping that the asking price of the home or homes you’re looking at will drop more, you risk losing your gains by quite possibly having to pay a higher interest rate and larger down payment by the time you get off the fence. In other words, don’t try to time the market. It’s much too volatile to take that risk.

 

Protect your home with annual pest control

Posted at 5:56 AM, Mar. 23, 2007

Cherry blossoms are blooming, tulips  are peeking out, and termites and other pests are making their presence known.  According to the National Pest management Association, termite season usually starts in late February to early March and lasts through June.

The association points out that swarming occurs with warmer temperatures because this is the time that termites leave their colonies to find new nesting sites. Furthermore, in most cases swarming may be the only indication that there is an infestation. However, lacking a swarm doesn’t mean your home is free of termites.  

Regular inspections and carefully considered treatment is necessary to stay on top of infestations and to protect most people’s largest investments—their homes.  You should check with your insurance company concerning coverage for damage from wood-boring insect damage.  In almost all cases of which I'm aware, it is not covered by homeowners’ insurance policies.

Infestations can go undetected by homeowners who don’t inspect their property annually. Termites eat wood, flooring, sheetrock, wallpaper, plastics, paper products and fabric made of plant fibers, which can compromise the structural soundness of a home.  Homeowners are encouraged to protect their properties with annual inspections from a qualified pest professional.  In the Richmond Metropolitan Area, there are a number of very good pest control companies who can offer year round service.   If you would like a referral to one or more of these companies, feel free to email me

Buyer's Market????

Posted at 12:03 AM, Mar. 18, 2007

 Almost daily, there is a newspaper article or television broadcast discussing the change in the real estate market.  The message is clear – the market HAS changed. 

Although the Richmond Metropolitan area has been mostly unaffected by a downward pressure on prices, it has nonetheless seen a change in how long a home will stay on the market.  Gone are the days when a home would sell in days or weeks.  Instead we have returned to a more normalized market where homes can take months to sell.

Sellers who want to move their homes quickly can’t afford to be so stubborn about their asking prices. Remember, buyers are taking note of the change in the market and more than ever they are looking to find deals.

According to David Lereah, the chief economist for the National Association of Realtors, nationally, we are now in a solid buyer’s market.  He says “It has been a seller’s market for many years, but now we are seeing people across the country making deals and bringing prices down.”

While I don’t necessarily agree that we are in a true buyer’s market where sellers have to yell “uncle”, I do know that buyers are taking more time because they have so much inventory from which to choose.  Last year and in the “boom” years, competition for homes was so fierce that buyers were afraid they’d lose a home so they offered full price or more and were willing to give up important rights such as getting a home inspection.  Those days are long gone. 

Sellers who are still thinking they can get the inflated prices of years past will find themselves in quite a jam if they don’t make the shift before even more of the spring surge of homes come on the market.  Demand is picking up somewhat but there is still a large inventory of homes that have lingered for months.  The key to a successful home sale is smart pricing.  The more realistic sellers are about pricing their homes right the first time, the faster those homes will sell and for the highest possible price.

Do You Have The Right Kind and The Right Amount of Homeowner's Insurance?

Posted at 6:35 AM, Mar. 11, 2007

As recent weather events across the country have demonstrated, weather catastrophes can happen any where at any time, regardless of the season or location.  The onset of spring is not only a good time for “spring cleaning” but also a great time to conduct a homeowner’s insurance maintenance and review.  Do you know how much your insurance is and what is covered?  Do you have the right type and the right amount of coverage?

Review your policy annually. Making sure your home has sufficient insurance coverage should be a periodic exercise.  Topics to discuss would be the addition of any high end luxury items such as a big screen plasma or LCD television, new jewelry or art work.

Find out what is and is not included in your policy.  Do you have detached structures such as garages, gazebos, greenhouses, or even a pool?  Are they covered by your policy?  Does your policy cover replacement costs?  Most do, but does yours?  Does your policy offer a revision/increase in coverage amounts based on inflation? 

What are the benefits of flood insurance? According to the FEMA website, some of the benefits are:  Flood insurance compensates you for all covered losses; coverage is relatively inexpensive; you can depend on being reimbursed for flood damages even if the President does not declare a Federal disaster; you do not have to repay a loan as you might have to with many Federal disaster relief packages – your covered losses are paid in full; you can count on your claim being paid in the event of a flood loss because NFIP flood insurance is backed by the Federal government; your agent can help you handle your claim quickly so that you will not have to put your life on hold if a flood damages your property.

Just what constitutes a flood?  In plain English, a flood is an excess of water.  Floods often happen when bodies of water overflow due to heavy rainfall or thawing snow.  But you don’t have to live near water to experience a flood.  A flash flood can strike anywhere without warning.  And, just an inch of water can cause costly damage to your home.

Home Improvement – Are You Covered?  When it comes to home improvement, most people do their homework.  They research contractors, materials, and architects – whatever it takes to get the job done right. But the truth is, most people overlook one important detail – insurance. Over half of all homeowners are underinsured.

Additional living expenses after a disaster - This is a very important feature of a standard homeowners insurance policy. It pays the additional costs of temporarily living away from your home if you can’t live in it due to a fire, severe storm or other insured disaster. It covers hotel bills, restaurant meals and other living expenses incurred while your home is being rebuilt.

Coverage for additional living expenses differs from company to company. Many policies provide coverage for about 20% of the insurance on your house. Some companies will even sell you a policy that provides you with an unlimited amount of loss of use coverage, for a limited amount of time.

If you rent out part of your house, this coverage also reimburses you for the rent that you would have collected from your tenant if your home had not been destroyed.

You should talk to your agent or company to make sure you know exactly how much coverage you have and how long the coverage will be in effect. In most cases, you can increase this coverage for an additional premium.