A Single Woman’s Guide To Home Ownership

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The traditional view of home ownership usually includes a married couple, but times have changed, and more and more single women are entering the housing market. In fact, almost twice as many single women are purchasing homes than single men, and almost one in five homes purchased today are purchased by single women. So why are single women making up such a large part of the housing market, and what are the special considerations single women should make when purchasing a home?

 What Women Want!

The demographics of single women buying homes are quite diverse. From young professional women in their 20s to divorced mothers in their 40s, there are really no typical single women making home purchases, and their needs are just as diverse. Overall, however, there do appear to be a few trends in the market, and here is a list of what the average single woman is looking for in a new home.

  • Most spend less than $200,000
  • Prefer two bedrooms or more
  • Less likely to choose new construction
  • Will compromise size and cost to get other amenities, but not location
  • Smaller spaces are acceptable, and many prefer condos
  • Desire security and safe neighborhoods with a strong community feel
  • Look for close proximity to stores, shopping, and fitness centers

 Things To Consider

If you are a single woman looking to enter the housing market, or know someone who is, then what should be considered before making the leap into home ownership?

Essentially the considerations are much the same as those of any homeowner. Taking a realistic look at your financial situation is always important. Seeking out the advice of a qualified financial advisor and a REALTOR® can make the process less difficult. It is also important to be sure you are not entering into any unwise loan agreements that may not be wise down the road, such as no-money-down deals. It is also important to have a clear picture of what your needs as a homeowner are, and that you don’t settle for something that will not work with your particular lifestyle.

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A Nice Home Or A Nice Neighborhood

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When you start shopping for a home, you probably have a very specific image of what you would like that home to look like.  You probably also see the perfect neighborhood surrounding that perfect home.  Every buyer sets out with an image of the house they want to own, but in reality compromises are often necessary in order to stay within your budget.

Compromising On The House

There may be certain things that are non-negotiable when it comes to your new home, such as the number of bedrooms or a two-car garage.  But as you take a look at the homes that are within your budget, you may discover that it is not likely you will get everything on your wish list.  But the great thing about owning a home is that you have the power to remodel it at any time.  Once you are in your new home, you can renovate or even add on if necessary to create the home you really want.  And if you have managed to stay below your budget, you will even have the extra money each month to make some of those changes.

Compromising On The Neighborhood

So you’ve found the house of your dreams, but the neighborhood isn’t precisely what you were hoping for.  Too much traffic, some houses that are becoming run down, or many other issues can mar the area your house is in.  In most cases, you will have to accept that you cannot change the neighborhood, and this means that you have to decide if the problems are things you can live with or not.

In some cases, buying in a run-down neighborhood can be a strategic move.  If many people are buying up the houses and improving them, then your home might one day be worth a lot more.  However, you must realize that this is a risk and it might not work out that way.

Another thing to bear in mind is that if you choose to buy the nicest house in the neighborhood, you may have trouble selling it down the line.  If other houses in the area are available for less, why would anyone buy your expensive house to get into the area?

So Which Matters More?

In the long run, when it comes down to choosing between the right house and the right neighborhood, you should choose the right neighborhood.  While you can change your house for the better, you can’t count on your neighborhood changing; in fact, it might get worse.  So choose the best neighborhood you can afford even if the house there isn’t perfect.

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Avoiding Mortgage Fraud

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Unfortunately, fraud and identity theft are increasing at an alarming rate every year, and mortgage fraud is one of the most important types of fraud from which you will want to protect yourself. So what constitutes mortgage fraud, and how can you prevent this from happening to you?

What Is Mortgage Fraud?

Essentially, mortgage fraud is defined by the FBI as any material misstatement, misrepresentation, or omission relied upon by an underwriter or lender to fund, purchase, or insure a loan. There are several different types of mortgage fraud, and each is a serious offense that can have a huge impact on you and your credit. Here is a basic list of the most common types of mortgage fraud.

Undisclosed Kickbacks-This includes any financial deals between a buyer and seller that are not included in the mortgage documents.

Falsifying Income-Inflating your income is a serious offense on any loan document, especially a mortgage.

Undocumented Non-Owner Occupancy-Rates and other fees can be higher for income and rental properties, but resist the temptation to hide this fact in order to save money.

Inflated Purchase Price-In some cases this method is used to obtain a higher appraisal of a property, but it is illegal and may cost you your home.

How To Protect Yourself

The purchase of your home will probably be the greatest financial investment you will ever make. Ensuring that you know what constitutes mortgage fraud is half the job, but it is also important to know how to protect yourself from professionals who may not have your best interests in mind. In general the best method is to ensure that your real estate agent and mortgage lenders are professionals with considerable experience, professional credentials, and good references. It is also important to keep in mind that if an offer seems too good to be true, or if you feel that your REALTOR® or lender has given you advice that sounds as if it might fall under the category of mortgage fraud, you seek the advice of another professional. In this way you can avoid getting yourself into what may be a potential financial disaster.

Your property is not only your home, but also your greatest asset, and losing it to mortgage fraud can be avoided when you are armed with these facts.

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Get Into a Home of Your Own

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You want to get into a home of your own. Many home buyers – just like you – started their journey with our no-nonsense Home Buyer Workshop (register below).

The Market has Turned Around

After enduring years of discouraging economic news, we’re finally seeing the residential real estate market turning around in the greater Inland Valley area. There are still a few foreclosures, short sales and bank-owned homes for sale, but there are fewer homes available to buyers than “normal” and more buyers competing for them. This means that prices are rising. Interest rates seem fairly stable so far in 2014, but are expected to rise eventually.

Many well-priced homes are sold within days of being listed. So, when you find the home that “wows” you, it’s important to quickly swing into action in order to get the house that’s perfect for you before another buyer – who has done their homework and knows what to do – beats you to it. We’ll talk more about how all this works when we meet.

Anyone considering taking advantage of the historically low interest rates and rising home values, or who just wants to “stay in the know” is encouraged to request a private consultation or sign up for our unique and informative Home Buyer Workshop. You will learn what you need to know to become a savvy home buyer like many of our clients and workshop attendees.

Either way, you will be a step ahead as you work to figure out if this is the right time to buy for your personal situation, or if you should wait. You will also learn how the professionals identify real bargain homes, ‘dogs,” and how to negotiate sweet deals. Learn what “foreclosure” means and how to tell the difference between a “short sale” and “bank-owned,” and which of these approaches is potentially a good deal versus a potential nightmare.

Here’s what our workshop covers:

  1. What’s going on in the economy right now & why the news is so confusing
  2. A professional overview of the real estate market in the Seattle area
  3. Why you need an agent; what’s a broker; what’s a Realtor?
  4. How to take advantage of foreclosures without losing your shirt
  5. The steps all successful buyers go through to purchase a home
  6. How to figure out how much house you can afford
  7. What it means to get pre-approved, and how to do it the right way
  8. How you can avoid common pitfalls in the home-buying process
  9. We review some homes currently for sale and talk about what to watch for
  10. And finally, you’ll have the opportunity to ask your own real estate questions

 

Get answers to your questions, such as…

* Just what is a “Buyers Market?”

* How does the real estate process actually work?

* What risks do buyers need to be concerned about?

* What do I need to know about shopping for interest rates?

* Where can buyers get straight answers about mortgage loans?

* How can I find out about down payment and closing cost assistance?

* Where can buyers get straight answers about the real estate economy?

* What are the most important considerations when buying a house or condo?

* How can buyers take advantage of current favorable Buyers Market conditions?

* How does the current economic situation affect me and other home-buyers?

 

REGISTRATION

Register online below. Choose the date you wish to attend from the drop-down menu, then complete and submit your registration. We need your full name, phone number and email address, and the same details for anyone else who will attend with you.

You will not be asked to buy or sign up for anything. If you’d like to receive workshop preparation materials in advance of the workshop, say so in the “Your Home Buying Questions” section of the registration form.

We’ll contact you a day or two in advance of the workshop to remind you of the date, time and location for the workshop. Your contact details will be held in strict confidence and are never shared with others.

 

Home buyers sometimes ask about the Realtor® designation that we display. Real estate agents (now referred to as “brokers”) can only become a Realtor by joining the National Association of Realtors and subscribing to the organization’s Code of Ethics. It’s mission is to protect the interests of homeowners, home buyers and its members throughout the United States. Here’s a short video put together by the Washington Realtors association that explains all of this in greater detail (Click Here). We would be glad to talk with you about why we have chosen to be Realtors.

Register today – or send us your questions – to get started on the search for your dream home!

 

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DSC_1135To help achieve your goals in relation to buying a home I need to ask you some questions that will help me to understand how I can serve you better.

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Applying For a Joint Mortgage Loan With Your Spouse

 When you are ready to buy a home, applying for a mortgage is one of the first and most important steps.  For married couples, this usually involves applying for a mortgage loan jointly.  This means that the loan will be in both of your names and you will be co-owners of the house.  While it may seem like the obvious thing to do, there are a few situations when applying with only one name might be wise.  Here are a few tips on joint mortgage applications.

Is Your Credit Looking Good?

If one of you has a poor credit rating, it could strongly affect your chances of qualifying for the loan and will definitely raise the interest rate even if you do qualify.  If the person with poor credit does not make a large sum of money and their income is not required to qualify for the loan, it might make more sense not to apply jointly.

Employment Doesn’t Matter

If one of the partners is unemployed, a stay at home mom or dad or homemaker, or for any other reason, they won’t have much impact on the amount of money you can qualify for.  That doesn’t mean you shouldn’t apply jointly.  First of all, marriage is a partnership, and having the home in both names gives a feeling of equality even if one person makes the income.  Secondly, the person with no income might still have a very good credit rating, making it easier to get the best interest rate!

A Financial Commitment

When you apply for a home loan together, you are connecting yourselves financially in a major way.  Joint mortgage loans aren’t just for spouses; many life partners also purchase a home together.  Just be certain that you are committed to the relationship before you sign mortgage papers.  It can make things very complicated later if you don’t.

A joint mortgage is usually a good choice for any couple, because you can combine your income to get approved for a larger mortgage or a better rate.  Just bear in mind that there are situations when you are better off keeping the loan in one name only, mainly for financial reasons.

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7 Tips to Win a Bidding War When Buying a Property

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Today’s housing market is markedly different than what we had just a year ago. Back then, people could make low-ball offers and actually have a good chance for winning. Now buying a property has become more expensive and complicated; there are reports of bidding wars breaking out all over the country, even going into slower selling seasons. There’s more to winning a bidding war than crushing other investors with your bank account until the home seller caves to your offer.  Whenever buying a property, whether it’s a home you’re going to live in or one that you’re acquiring as an investment, it’s best to do your research, set boundaries and be strategic. Armed with knowledge, you’re more likely to be the victor in your battle to buy a property, without paying more than you should. How to Win a Bidding War Here are seven tips to keep in mind to help you win a bidding war:

1. Know the Neighborhood. Make sure that your expectations aren’t out of line with your capabilities. Some neighborhoods are more expensive, others have more or less popular types of housing, and they all have different amenities to offer nearby. There are many websites out there that can give you price comparisons for properties in each community. They can help you avoid neighborhoods that are out of your price range and discover the places with the right features nearby. Make use of them so you can narrow down the places where you’d like to buy a property.

2. Involve the Right Players. Unless you’re professionally trained in the purchase and sale of homes, you should pick a representative with whom to work that is experienced, local and well known. The more respected the buyer agent or broker is within the community, the better chance they have at successfully courting listing agents. While you’re at it, get in the listing agent’s good graces, as he or she is the only person who will meet all of the parties involved in a sale. In a competitive situation, working with a known broker and meeting face-to-face will make the listing agent feel more comfortable and boost your chances of winning, especially if two offers are very close.

3. Run, Don’t Walk. The Internet has sped up the sales of homes immensely. Some houses are selling the day they hit the market. If something you want becomes available, don’t wait for the open house and forget low-ball offers. Get there as soon as you can to make your evaluation and make your best offer sooner rather than later. You may only get one crack at this, so make sure you prepared ahead of time with all your paper work in order so that when the right property enters the market, you can swoop in to get it.

4. Cash is King. Knowing that speed is the key with winning a bidding war, you should be prepared to pay in cash if at all possible. No matter how big the down payment, processing and approval of a mortgage from the time the offer is accepted until the time the keys are handed over can be a long wait. Coming to the table with cash gives you a leg up on the competition. Sellers love cash offers because they’re more reliable and less likely to fail at the last minute. Not all buyers or investors can make all-cash transactions, though. If this is you, get your loan pre-approved and be sure to bring as much cash to the table as makes sense for your financial situation.

5. Be Flexible. Expressing your willingness to work with the seller’s timetables and requirements can go a long way toward a successful purchase. If the sellers want to remain in the home for a period of time after closing, offer them a “lease back” or “rent back,” which means that you would become their temporary landlord until they move out. If you are making a bid on a short sale, make it clear to the sellers that you are willing to wait for the bank’s decision, no matter how long it may take. One thing you might not want to be flexible on is the home inspection. Whether you plan to move in or are buying a home as an investment, you don’t want to end up buying a property that needs a lot of expensive work to be livable.

6. Sweeten the Pot. Agree at the get-go to increase your offer if there’s a higher bid from another buyer.  This can be accomplished by writing into the contract that you will offer, for example, $1,000 or $5,000 more than the highest offer submitted.  When pursuing this technique, make sure you include a cap on the total amount you are willing to pay or you could easily surpass what you wanted to spend without it. Pick the point at which you will walk away from the home and stick to it. Getting caught up in a bidding war can be a bit exhilarating; don’t get so caught up in the thrill that you overspend.

7. Try, Try Again. Don’t be intimidated by higher bidders; if you really want the property and you think you can make it work, push forward. Make the offers and bids that you’re comfortable with, and remember your “walkaway number.”  Bidding wars can get emotional quickly, so it’s important to set and remember your financial limitations. If you lose the bid, offer to be a backup in case the accepted deal falls through. Remember that not every opportunity will go your way, and it’s better to have bid and lost than to have overbid and overpaid. Bidding wars have been more common in the past for lower-end properties, but now no property is safe. Even with all of this information, winning a bidding war can be a gamble and require a stroke of luck to achieve success in buying a home. Employ winning strategies, but don’t get so caught up in the drama that you end up buying a property for more than the maximum price that you can afford to pay. Do your research, know your limits and be aware of local real estate market values. Being armed with the proper knowledge can give you an edge over the competition, allowing you to outsmart them without overbidding.

Move-up Buyers

Tips For Move Up Buyers

It’s Time to Move Up!

Here’s the dilemma, at the time you bought your current home, it was the right place for your family’s needs. It was the perfect home that fit your finances, located in a great school district, and cozy enough to be relatively low-maintenance. That was three kids and several promotions ago. With the passing of time, you’re wondering where all the space went?

Longing for More Room or An Upgrade?

Like many growing  families, like that cozy feeling of your current home has gradually drifted into wishing there were more room. You realize it’s time for more space and an upgrade. You figured it’s worth tackling the challenges involved in moving even if it’s across town. This much we know – it makes no difference if you’re moving across town or across the country, moving is never easy. It’s tough on you physically and mentally. Plus you have to work through the logistics of selling the home you live in and purchasing a new one, often at the same time. That’s when it gets real complicated and you know you need an expert real estate professional who has experience managing two transactions at the same time.

Here are some tips we recommend to clients moving into a larger, more expensive home.

Preparing for Moving Up

Before you think about buying a bigger home, begin by prioritizing your home buying needs. Things have changed since you last bought your current home, so your needs have changed dramatically. Just in case you may have forgotten, here are some of the more important aspects of buying a move-up home.

  • Select an experienced real estate professional to help protect your interest
  • Get loan pre-approval or at least pre-qualified for a mortgage
  • Budget for the costs of the new home.
  1. Arrange funds for the down payment.
  2.  Reserve funds for your transition.
  • Knowing the available housing inventory and the type of market your area is experiencing – Looking before you leap
  • Getting your current Jonesboro home ready for the market
  • Price it right!
  • What if you find a new home for yourself before selling your current home
  • The need for a longer closing period – All parties may not be in favor of this!
  • What if you have to make a contingency sale offer
  • Be prepared to rent-back your home between the sale of your current home and the purchase of your new home

Moving: The P’s Have It

Planning, Purging, Packing, Paying and. Partying

No matter how far the move, next door, across town, or even across the country, a well-executed move begins with planning. This is the stage where you assess the time you have to get ready, what you are bringing with you, how it is getting to the new location, what help you might need, and the budget required.

When hiring a professional moving company, get recommendations, check their records with the Better Business Bureau to see any complaints, and only use moving companies that are licensed, bonded and insured. Get more than one estimate, and find out if those estimates are binding or non-binding. Be sure that everything you want to move is included in the estimate, or you might have some expensive additions to your bill. Get these estimates in writing, never over the phone.

If you can, moving in less popular months, from 0ctober through April, makes it easier to book professional movers. Having contracts out on the counter when you bring companies in to make estimates will show them that they have competition and may enable you to negotiate a better deal. When you do accept an estimate, read the contract very carefully and ask questions before you sign it. Moving scams are fairly common. Keep the contract easily accessible for quick reference. Remember: the movers will have your belongings and will expect payment according to the terms of this contract. The last thing you want is to have your possessions held hostage because there is a dispute about extra costs.

Professional movers charge by weight, distance of the move, and other services. Additionally, if the truck cannot park close to your new home, extra expense may be incurred if movers have to walk items long distances. Check to ensure that you can move in on the delivery date, as most companies charge storage fees if the truck cannot be unloaded on schedule.

Pets, Plants, and Potentially Hazardous Possessions

Pets and plants require special attention. A cross-country or international move may be game-changing. If you are intending to take plants or pets on a long distance move, you need to begin getting the details in order. Are their restrictions about bringing live animals or plants where you are going? How will you transport and care for living creatures or plants in transit? Temperature, water and care issues will need to be addressed.

If you intend to move exercise equipment, machinery or lawn tools, you will need to drain oil and fuel from them, and disconnect batteries. Many companies will not move batteries, and so they will need to be safely discarded. Additionally, there are numerous hazardous materials that cannot be transported by these companies. Anything corrosive, flammable or explosive is not allowed for safety reasons. The following items should not be among your belongings that are transported by professional movers: acid, aerosol, batteries, lamp oil, car oil, charcoal, gasoline, matches, fertilizer, weed killer, cleaning fluids, ammunition, bleach, nail polish and remover, chemistry sets, kerosene, fireworks, poisons, propane tanks, or loaded weapons.

Preparing the Places: Cleaning and Painting

How you leave a home speaks volumes about who you are – leaving a clean home for the new residents is good manners – and one that you will appreciate when you enter your new home, too. Plan on either cleaning your old home, empty as it is, before you leave, or consider hiring a cleaning crew to come in and clean before you hand over the keys.

When you arrive in your new home, you might want to do some basic cleaning if the space is not up to your standards. Painting prior to unpacking is also a good idea – after all, it is so much easier with your possessions out of the way. If you are able to pick out colors and paint prior to any items entering your new space, you will be rewarded further. While you are at it, shampooing carpets before moving in the furniture and boxes can be a fantastic idea. However, be aware that moving in with wet paint on the walls can be a hazard to your new paint job, your belongings, and to your movers’ clothes. Damp carpets can collect footprints and damage boxes placed upon them. Allow time for the paint and carpets to dry, and mark areas that might need special attention.

Actually Making the Move: The Personal and the Professional

Packing might seem obvious – get your stuff in boxes or bags and put it in a vehicle to bring it to the new place. Moving companies are aware of the best way to move pianos, grandfather clocks, tables or art that include large pieces of glass, and other items that require crating or disassembly, and this is one advantage of using them. When in doubt, do a bit of research and consult an expert.

Inquire with your homeowners’ or renters’ insurance company about their policies around moving to determine if you should purchase additional coverage. Most policies only cover your possessions when they are in your home – not when they are in a truck between two homes. There are policies that cover your possessions during a move, and they are generally available from the rental agency where you got the truck.

Professional moving companies that you hire to do the complete job may be responsible for breakage, but often that requires that you paid them to do the packing and it requires that you report the loss within a specific time period. If the item is sentimental, replacement or compensation is only part of the issue. Pack fragile items yourself in smaller boxes with adequate precautions and if possible move them yourself. If using a moving company, be specific if they are moving valuable objects that require special care. Companies might have limited liability and require insurance be purchased to cover certain items.

There is a hybrid method of moving: pack and move yourself, but hire a bit of help when you need it. Often local moving companies have laborers that may be hired by the hour to load and unload furniture and boxes. Their knowledge can help you to maximize space in the truck in addition to saving your back. Whether using professional movers, doing it all yourself, or taking a hybrid method, inventory all your rooms, and create a system to identify where the boxes go in the new home – use colors or labels on the boxes and then clearly mark the rooms where those boxes are to land.

Paying for a move seems obvious – from packing materials to trucks, there is a need for a budget, sometimes hiring help, and incidentals. One of the important but sometimes neglected parts of payment is to ensure that those who are handling your possessions feel as valued as you feel about the items that they are moving. While most companies don’t expect a gratuity, tipping is appreciated by laborers who work long hours for low pay. Of course, tipping usually happens after the important work is done. Offering movers refreshment, drinks and even a breakfast or lunch won’t break the bank and will often result in your belongings being treated with increased respect.

If you are doing the packing yourself, it will take more time, but you get the control. Unlike hiring a professional company with many experienced hands to pack boxes and put them on the truck, packing yourself usually has to begin much sooner. When packing boxes, ensure that they are sturdy and sized for the contents you are putting into them. If a box is too large and filled with heavy items, it will be impossible to lift. Boxes should be no more than 50 pounds in weight, and preferably closer to 30 pounds. Furthermore, mixing fragile items into a large box that is poorly labeled might result in breakage or loss.

Label boxes well and seek to organize the contents so that unpacking can be achieved in an orderly way and contents can be identified easily should the need arise. Keep like items together: books go with book ends, lamps with their extension cords and shades, pillows and bedding together, and so on. Each room might have one or two boxes with a tag that reads “Open First” so that essential elements of the room are easy to find.

When moving boxes, don’t be ashamed to use a dolly or get help with heavier items. Lifting boxes and moving furniture is hard work that can cause injury. Bending from the knees is a rule of thumb, and when in doubt, get a hand with large or awkward items. In the truck, pack heavy boxes on the bottom, and beware that boxes might topple in transit.

Whether you move yourself or a moving company is doing the work, designate a few boxes that are clearly labeled to be put in central places in key rooms to ensure a “soft landing”. For example, have a Kitchen Box that contains key items for making the first few meals in the new home. You might want a good frying pan, a pot or two, a coffee maker (with a few filters and ground beans), a few plates, glasses and mugs, some silverware, napkins, salt and pepper, some cooking utensils, a cutting board and a couple of good knives, can opener, corkscrew, matches and anything that might be helpful before you get to unpacking every kitchen box. In this manner, with a quick trip for some essentials at the grocery store, you could be “up and running” in your new kitchen within a very short time.

Have a box or perhaps two for personal care items, ensuring that towels and necessary products are easily found if your schedule requires that you are immediately on-the-go once you reach your new home. Consider tucking a clothes iron into this box, to enable people to look their best if packed clothes are too wrinkled. Never pack prescription or other important medications in boxes that you are trusting to a third party; keep prescriptions with you so that you can be responsible for them. Having a first aid box in the car or at the top of an identified box could be most helpful.

When packing clothing, consider packing a suitcase or box for each family member that contains clothing for the first week of your arrival. Have them clearly labeled and ensure that there are a few pieces of clothing that are appropriate for the weather you will be facing. Consider adding clothes for both casual and fancy occasions since having a small wardrobe of clean clothes ready to go, means that people won’t be fumbling through boxes to find something to wear that first day or week. Don’t forget to pack a few pairs of shoes in these bags, as well.

When you are moving a long distance, ensure that you keep passports, extra checks, tax records and other useful, personal documents with you for peace of mind. In the event that you need them, you’ll know just where to find things. For extra insurance, scan or photograph and email yourself a copy of your passport, your health and other insurance cards, prescriptions or other medications you take, and the phone numbers of your credit card companies.

After the Move: Plan to Party!

Finally, make the new home yours by hosting an event. Not the day you bring that first box through the door, but plan to reward your efforts and bring joy into the home with some event that will mark the occasion. If you are new to a town or city, it creates an opportunity to meet your neighbors or get to know people in your new circles better. Even having one or two people over for coffee can put you in the role of host, opening your home to a guest, and announcing to yourself and the world that this is your new domain. Often planning for a company creates a deadline or a goal, encouraging “settling in” and getting the majority of those boxes unpacked.

And, after all the work, you’ve earned some fun.

Housing: Is It Becoming a Seller’s Market?

market-gaugeThe National Association of Realtors said on Thursday what home buyers and real estate investors in many parts of the United States have known for months: it’s becoming a seller’s market.

The number of homes listed for sale in January fell by 4.9%, leaving 1.74 million properties on the market. That’s the lowest since December of 1999, when there were 1.71 million homes on the market. By contrast, there were 2.91 million homes on the market two years ago at this time.

After adjusting for seasonal factors, home sales rose by just 0.4% in January, to an annual rate of 4.92 million units. Still, that’s up from 9.1% one year ago.

The upshot is that there’s a growing pool of buyers chasing a shrinking supply of homes. If the trend holds, prices will keep going up. At the current pace of sales, it would take just 4.2 months to sell the current supply of homes available for sale, down from a 6.2 months’ supply one year ago.

While inventories typically increase in the spring, the Realtors’ group has expressed growing concerns that sales volumes are being held back by the lack of choice. This is good news for homeowners who have watched home prices drop over the last six years, but it’s bad news for home buyers and investors — and for anyone that makes their living selling real estate.

Inventory declines have been the most dramatic in California, Arizona, and other markets that witnessed some of the largest home price declines. Those cities have large numbers of underwater borrowers — people who owe more than their homes are worth — while many others may have equity but aren’t willing to sell because prices have fallen so far.

Investors have also been aggressive in buying up properties that are selling for less than their replacement cost.

Home sales could rise to 5.2 million units this year, an increase of nearly 12% from last year, according to economists at Goldman Sachs. They base their forecast on household formation and demographics, which both suggest rising demand for housing in the coming years, and affordability measures such as mortgage rates and home prices.

But the economists note that there’s a considerable amount of uncertainty that could make those targets hard to hit, particularly if there’s nothing for would-be buyers to purchase.

Editor’s Note:  If you’ve been sitting on the fence waiting to invest in rental property, then this may be the year to take action.

 

10 Ways To Find Money

  • Counting Cash FBN

Employees who’d grown accustomed to bigger paychecks are now feeling the shock of the expiration of the Social Security payroll tax break that ended at the start of the new year.

The so-called payroll tax holiday reduced the employee’s portion of the Social Security contribution rate from 6.2% to 4.2% of earnings in 2011 and 2012. But the cut, intended to put more money in people’s pockets and stimulate spending, was temporary and has now reverted to its former level, resulting in smaller paychecks for workers.

Gail Cunningham, a spokeswoman for the National Foundation for Credit Counseling, or NFCC, warned that employees need to act fast to adjust their budgets, especially if they’re living paycheck-to-paycheck.

“If a person was fortunate enough to have received a pay raise, it’s likely that this Social Security tax increase will wipe out most of it,” Cunningham said.

The NFCC is the largest and longest-serving credit counseling organization in the U.S.

To help you find extra money to offset the loss of the tax break, the organization offered the following suggestions.

1. Adjust your withholding. Use the IRS worksheet to calculate the proper number of allowances so you’ll keep more money every month, rather than receive a big refund once a year.

2. Pay with cash. People who use cash to pay for purchases typically save 20% compared with their credit spending levels and don’t feel deprived.

3. Refinance your mortgage. Historically low mortgage rates might enable you to lower your monthly payment.

4. Save $10 in 10 categories. Carving $10 out of 10 categories in your budget can be a relatively painless way to find extra money.

5. Do it yourself. Stop paying other people to wash your car, clean your house, mow your lawn or do other you can do yourself.

6. Quit bad habits. Make good on your resolutions to stop smoking, drinking and playing the lottery.

7. Clean out your storeroom. It’s a double-play to sell stuff you no longer need and stop paying for extra storage space.

8. Shop for insurance. Examine all your policies, compare rates and ask about ways to lower your premiums or obtain discounts for loyalty, good driving or bundling multiple polices.

9. Examine your bank statements. Cancel automatic payments for banking goods and services you don’t need. Don’t use out-of-network ATMs. Negotiate with your financial institution to lower your fees or change to a different bank.

10. Earn extra income. Getting paid to do something fun won’t feel like work, and honing a skill can pay dividends beyond financial.

 

Buy, Fix, Sell Pt. 5

 

Building a Garage

My first project was to build a new garage.

  • Design.
    I bought several books about garage designs and chose the easiest: a square 24 x 24 with no windows and a service door on the front instead of the side to deter burglars.
  • City Permit.
    Our old shed was 10 x 12. The new garage would be constructed one foot from the side property line and two feet from the back property line. Eaves that extended over those lines were an encroachment; we followed city code.
  • Remove Existing Structure.
    I called all over town and received quotes from $150 to $1200 to demolish and haul away the existing shed. I hired the $150 guys.
  • Pour Slab.
    I found a guy who had a crew who worked for the city and hired him to pour the slab, apron and install a row of concrete block. The crew, however, gave no thought to where they dropped the J bolts, which, in some places, ended up being positioned directly under the studs.
  • Walls.
    I built the walls on the slab and called on friends to help raise the walls. Inserted some of my own J-bolts to secure the sill plate to the concrete block.
  • Trusses.
    Friends helped raise the trusses. It costs a little more to buy trusses, but it’s easier and less time consuming than building rafters.
  • OSB.
    Oriented strand board was cheaper than plywood. We nailed 1/2-inch OSB to the garage walls and 3/8ths OSB to the trusses, using clips to hold them in place on the roof.
  • Composition Shingles.
    First, stapled tar paper. Second, nailed drip edge. Third, we tarred over the nails my husband put in the wrong spot on the beginning row and continued to lay shingles from the bottom up, finally nailing and gluing down the ridge cap.
  • Garage Doors & Opener.
    I didn’t want to do this, so I hired an unfortunate person who made it his “mission.” After two days, I fired him and hired a real door installer.
  • Electrical.
    Code required a trench 18-inches deep. The electrician refused to come back out when the city inspector demanded a shut-off switch in our basement. One call to my congressperson got the job done.
  • Vinyl Siding.
    I ended up firing the professional installer and doing the job myself after I was forced to remove his entire starter row and the corner posts because none was plumb nor level. P. S. Attaching a fine-tooth saw blade backwards cuts through vinyl like a breeze.

Building a Kitchen Island

 

  • Framing.
    Using 2x4s, I created a frame much like my garage walls but spaced the studs to allow for a dishwasher and cabinet.
  • Dishwasher & Cabinet.
    I connected the electrical myself but hired a plumber to run copper piping to the water heater in the basement and connect the dishwasher. Finished off the sides with backing material that matched the cabinet. Did you know that a dishwasher connects by two screws to the underside of a counter?
  • Countertop.
    I ordered the countertop to match the other kitchen counters. The fabricator used the inside instead of the outside measurements I gave them, so they had to replace it for free.
  • New Floor.
    Of course, I tore up the floor putting in the electrical, so we laid new Pergo in the kitchen. I don’t recommend Pergo in the kitchen now. It warps and scratches.

Replacing Basement Stairs

 

  • Removed Stairs.
    After I tore out the rotted stringers, I discovered a mountain of fine mortar and sand, which I left in place.
  • Ledger.
    Because there was no wall to which I could attach a ledger board, I made a frame using mail-box posts to hold the 4x4s, nailing the 4x4s to the opposing walls.
  • Stringers.
    Using a circular saw and a carpenter square, I cut out custom stringers from 2x12s. This was complicated; the math and angles made my head hurt. Then I attached the stringers to the ledger.
  • Treads.
    I bought treads and risers. Cut them to fit as each tread was a different width and needed to fit perfectly between the opposing limestone walls. Then I sealed them.

DECK

 

  • Floating and Traditional.
    I built two decks. One floated, with 2x6s that rested in the X of cement blocks. Deck boards were then screwed to the 2x6s. The trick with a floating deck is to level all the cement blocks first. The traditional deck was more difficult and required posts.
  • Posts.
    Because of the frost-line in Minnesota, post holes need to be 42-inches deep. After I grew tired using the post-hole digger, I resorted to scooping hard clay with an empty tomato can.
  • Cement.
    I mixed 6 bags of cement for each hole. Knocked one of them over while attaching the beam because it wasn’t quite solid. I sat in the dirt and cried because I had to start over from scratch.
  • Finishing.
    After I hung the joists from the ledger, I screwed down deck boards, installed railings and built two sets of stairs.
  • Staining.
    I used a whitewash stain to give it a distressed look. White decks are impossible to keep clean. I will never stain another deck white.

The Payoff

A few years later I discovered I desperately missed California. So we sold, made a 300% profit from all our projects, and used the cash to purchase on our new home in the High Desert.

 

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Buy, Fix, Sell Pt. 4

 

Framing Dividing Walls, Doorways, Closets and Ductwork

First, I picked up several framing books from the library and hung out in the lumber section at home improvement centers, talking to anybody who looked like they had some experience. Framing wasn’t as difficult as I had imagined, but it did involve math. Studs had to be spaced 16-inches on center; entryways required jack studs in addition to king studs; corners were a bit tricky, but it was straightforward. Here are things I learned:

 

  • Constructing a rectangle is easier to keep plumb. You can always cut away the portion of the sill where the door goes after it’s in place.
  • No existing walls are square. You might need to pound the top of the framing into place or use shims to make it level and plumb.
  • Attaching framing to cement walls or floors requires a power hammer that uses powder-activated bullets to drive specially formulated nails into the wood and cement.
  • A carpenter’s square is invaluable. So is revisiting the Pythagorean Theory from those high school geometry classes I skipped out on that said A-squared + B-squared = C-squared.
  • If the door knobs seem too high after hanging the door, the door is upside down.

Hanging Drywall (Sheetrock) & Mudding / Sanding

At the time I Sheetrocked the lower level, I weighed less than 100 pounds and stood about five-feet tall. If I had it to do over, I probably would not have hoisted those drywall sheets up on the wall myself. It’s too much weight for my back to have supported. Drywall sheets are 4 x 8 and one-half inch thick. Here are some tricks that I still use today:

 

  • Drive nails or screws 4-feet down from the ceiling. Then lift one corner of the drywall on a chair. Lift the second corner. Then heave-ho the section up snug against the wall to rest on the supports as you screw it into position.
  • Best buy is a drywall gun. It will save you hours.
  • Buy a T-Square. Trace cutting lines in pencil first, followed by drywall knife.
  • Kick the back of the drywall with your knee to break the score. Then slice the paper backing with your retractable utility knife.
  • Mudding requires at least 3 coats, remixing before applying to smooth bubbles. Use a mud pan.
  • Apply each coat in thin layers, let thoroughly dry and sand lightly.
  • If you can see imperfections in the mud, you will see them when you paint.

Electrical, Plumbing, HVAC

I made dinner for a friend who installs HVAC systems, and he helped me figure out how to cut a hole into my furnace. I don’t know if I would have heard the nerve to do that myself. He also ordered the venting materials from his supplier, but I put it together. Here are more tips:

 

  • You need cold-air returns. I ran them the full length of the lower level and boxed them in.
  • Electrical wiring can make your fingers hurt. Use an electrical wire stripper / cutter.
  • Buy a half-inch drill bit to drill holes in the studs for pulling through Romex.
  • You can do almost anything with copper piping, solder and a soldering gun. A little solder goes a long way, so less is better.
  • If you put plastic pipes into the wall, mark where they are so you won’t drill through them. If you find curly pieces of plastic and spot puddles of water on the floor, plug the hole you just drilled with an aerospace glue.

 

Fixing the Leaky Upstairs Deck

Some genius decided to put a deck over my downstairs sunroom. Except he installed deck boards, so when it rained or snowed, the ceiling below the deck accumulated moisture and sagged. Here is how I fixed that problem:

 

  • Covered exposed deck boards by screwing down new exterior plywood.
  • Over plywood, glued a one-piece base of rubber found at roofing centers. Don’t sniff the glue; it’s potent.
  • On top of the rubber, I glued indoor / outdoor carpeting. That deck never leaked again.
  • Be sure to step aside while pulling down wet ceilings made of drywall. I found dead turtles, live carpenter ants and an assortment of peculiar objects dragged into the dead space by mice and squirrels. Ick.
  • I installed paneling on the ceiling and walls in the sunroom below, which nicely finished off that space.

Installing a Fireplace

This was more work than I anticipated. You can say that about any project, but putting in a fireplace is time intensive. Especially doing the brick in a three-dimensional design.

  • You can direct a vent through the wall and then frame to the ceiling to hide the vent work.
  • Get a permit or you’ll be sorry.
  • Use fire-rated products such as Durock or greenboard, depending on your local code.
  • Laying ceramic tile on a concrete floor is difficult if the floor isn’t level, and none is level.
  • My city code required an area around the fireplace to be fire proof, not just fire-resistant.
  • The fireplace insert was a bargain compared to the prices of angle pipes and vent piping.

The Payoff

About a year after I finished, the city opened an expressway a block away. My road became a thoroughfare. I sold it for a fast $145,000 and moved on to the next project . . .

 

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Buy, Fix,Sell Pt. 3

Seller’s Mistake #2

In addition, because the sellers had nobody to advise them, they did not realize that they had to pay off the assessments levied against the property. FHA, at that time, would not fund a loan for a property with unpaid assessments. So, I picked up a property free and clear of the sidewalk assessment.

Seller’s Mistake #3

 

The sellers did know how to calculate the square footage of the property. They advertised this home as 1,200 square feet but, in reality, it was 1,600 square feet. They made the mistake of measuring the interior walls.

 

So I Cut Three Holes in the Roof

I might not have thought about putting in skylights, but I didn’t know any better. My imagination was free to roam and, because my upstairs’ ceiling was so close to the actual roof, my thoughts landed on skylights. If I could do one skylight, I reasoned, three were better. Here’s what I learned:

 

  • I felt much safer on the roof wearing a harness. I threw a long rope over the ridge and tied myself to a pole in the back yard. In hindsight, wrapping the rope where it moved across the ridge would have prevented rope burn on the shingles.
  • It’s easier to mark parallel lines for a row of skylights by snapping a chalkline than to try to draw a line using a level.
  • To ensure cutting through the roof in the right spots, I pounded 16-penny nails into each of the four corners I had marked inside the house. Then, once back on the roof, it was easy to tie off the four corners with string and see exactly where to cut.
  • My skylights were 24-inches wide, and my joists, like most, were spaced 16-inches apart. Cutting through the joists meant I needed to add reinforcement by tying in cripple studs.
  • The biggest mistake contractors and DIYers make is failing to properly seal the skylights. You do NOT want your skylights to leak when it rains or you’ll be back up on the roof during the next thunderstorm.
  • The second mistake is failing to visual the view from inside the house before cutting the holes. A street light shone brightly through my third skylight at night.
  • When I woke in the morning, however, I never had to wonder if it snowed last night.

 

A New White Kitchen!

White is very hard to keep clean, and it shows dirt. Every morning I transferred black smudges from newspaper ink on my hands to my cabinets. The white ceramic reflected dusty or wet footprints and paw prints. I do not recommend white kitchens. But when it was clean, it really sparkled! Here are my tips for kitchen remodeling:

Cabinets

 

  • Cabinets are priced by whopping percentages off retail. Don’t buy at those prices because they can be further discounted. When you find the manufacturer and style you like, then call every distributor for quotes and make them offers.
  • Everything costs extra: decorative trim and accents, molding, plywood sides, panels, glass inserts or feet, so decide upfront what is most important to you because it quickly adds up and could double your base price.
  • It’s faster and a lot more fun to bash cabinets off the wall with a sledgehammer than to carefully unfasten each screw.
  • Install upper cabinets before lower.
  • Use molly bolts if you can’t attach the cabinet to a stud, but drill a hole in the cabinet before raising it.
  • It’s easier to attach the cabinets to each other on the wall than trying to lift them as one unit.

Tiled Counters

  •  Glue Luann board over plywood for a smooth surface or install Durock on top of furring strips.
  • If you’re tiling an L-shaped counter top, start the pattern on the short-leg in the corner.
  • Remember to use bullnose or trim tile for the outside rows and the backsplash that abuts the cabinets.
  • Before covering the backsplash, make sure you have enough receptacles. In fact, just install a few more. You can’t have too many.

Appliances, Sink, Lighting

When shopping discount or big-box stores, ask about floor models or discontinued items stashed in back.

  • Cast-iron sinks are very heavy and expensive but worth it.
  • When installing a dishwasher, remember to include an air-gap for sanitary purposes, which will prevent backwash.
  • Padding the sides of the dishwasher with insulation will decrease noise.
  • Allow for height differences in the finished floor when installing the dishwasher so you can pull it back out if it needs repair.
  • Don’t hang lighting where you’re likely to walk into it.

Covering Stairs in Carpet

If your stairs are in good shape, it’s probably better not to cover them at all. Most people today seem to prefer natural wood. However, there are good reasons for carpeting stairs. The carpeting muffles sounds. It’s softer on bare feet. You’re less likely to get hurt if you trip and fall on carpeting. Here are tips to help you:

 

  • It’s less expensive, plus easier to install if you buy carpet with the padding attached.
  • Buy a top-of-the-line super-sharp carpet knife, which will easily cut any grade of carpeting straight and clean.
  • Cutting the carpet “as you go” will ensure a custom fit.
  • Start at the bottom and work your way up, stretching across the tread and kicking into the riser.
  • Tuck under the ends and glue.

 

Replacing a Bathroom Sub-Floor

Out of all the rooms in a home that could require a new sub-floor, the bathroom is most likely. Moist conditions are conducive to dry-rot and pest infestation.

  • If you’re installing new plywood in one piece, remove door handles, knobs, toilet paper roll holders, all exterior items from the walls before attempting to lay the wood.
  • Screws are less likely to pop than nails.
  • If your floor height increases, you’ll need longer a longer toilet supply line connector.

 

The Payoff

This house was in a flight path. Too noisy. I decided to move to the suburbs. When my next-door neighbor had an open house, I stuck a sign in my yard and sold it that afternoon for a profit of $32,000.

 

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Buy, Fix, Sell Pt. 2

Diamond in the Rough

Upon entering the house it was immediately clear why the place was still on the market. Looking up, toward the center of the living room ceiling, I noticed a jagged hole about six feet in diameter. The walls were covered by a hideous wallpaper with vertical stripes, and the maple floors were scratched, marred and neglected. Every room needed paint and a thorough cleaning.

 

A Deal Too Good to Pass Up

The house was vacant. I found out the sellers had bought another home and moved six months ago, which was information the listing agent was not authorized to divulge. To me, this meant the sellers were making double mortgage payments and were probably desperate to sell. I wrote an offer for the amount of the existing FHA mortgage, plus $100 earnest money deposit. My offer structure greatly confused the listing agent. He said, “Nobody sells houses like this. Why, the sellers would have to take money out of their savings account just to pay the commission and closing costs. This will never fly.”

Silly agent. The sellers accepted my offer as written. Including closing costs and assumption fee, this house cost me less than $1,000 out-of-pocket to buy.

 

The Remodeling Projects

Refinishing the maple floors.
Everybody warned me that tackling a floor sander was best left to the professionals; however, it didn’t seem that difficult to do. You know what? It wasn’t. Of course, the floor sanders available today are easier to operate than a drum sander and provide more protection against gouging the floors, but drum sanders are still in use. Here is what I learned:

  • Machine rentals are inexpensive. You will need a floor sander and an edger.
  • Sandpaper is very expensive. Buy more than you think you will need because you can likely return unused sheets.
  • Buy three grits of paper: heavy for first sanding, medium for second sanding and fine (150 or higher) for final sanding. Sanding screens are less expensive to use for the final sanding.
  • Seal off adjoining rooms by hanging plastic sheets over the doorways. Dust will fly everywhere.
  • Be patient, walk slowly and uniformly, pushing the sander.
  • When using an edger to sand along the walls, do not attempt to sand while wearing socks or you will be zipped across the floor.
  • A 2×4 scrap piece of wood wrapped in sandpaper makes it easy to sand corners.
  • Use tack cloth after sweeping / vacuuming to clean up every speck of dust.
  • Lightly sand after first coat of poly because the wood grains will rise.
  • Staining is not always necessary nor preferred. Natural maple is beautiful in its own right.
  • Let finish dry completely, preferably overnight, between coats.
  • Do not walk on the floors for at least five days.

Hanging a dropped ceiling.
Installing a suspended ceiling might make you wish you had paid more attention in math class, but it’s a pretty straightforward procedure consisting of main tees, cross tees, hanging wires, wall molding and panels. I brought my ceiling measurements to the hardware store and asked an experienced clerk to figure out the quantity for me. Here are my tips:

  • Begin measuring a level line at least six inches down from the joists at the lowest spot in the room. This way you will draw that line only once, instead of two or three times.
  • To determine the lowest spot, measure each corner from floor to ceiling. The lowest number is your starting corner.
  • The hardest part is “thinking upside down” when cutting panels to fit.

Stripping wood.
Because the wood baseboards, door and window trim on the first floor were oak, I assumed the painted wood upstairs was also oak. It was pine. But I didn’t discover that fact until I had stripped an entire bedroom. Still, adding wood shutters to the windows that matched the stain on the baseboards perked up the space. Here’s what I picked up about stripping paint from wood:

  • It’s a time consuming process, so you need a lot of patience.
  • Environmentally safe products take longer to work and are not as effective as the toxic products.
  • Ventilate room to avoid breathing fumes caused by the chemicals in the strippers.
  • Wear old clothes and gloves.
  • Steel wool helps to remove stubborn paint chips but a sharp-pointed object easily digs out dried paint embedded in grooves.

Building storage cabinet in hallway nook.
At the top of the stairs was a nook big enough for a dresser, so I had stuck a dresser in that spot. (See photo above–click to see the “before” photo.) But it wasn’t providing the amount of storage that I needed, and the space seemed wasted. I decided to close it off and build a cabinet. The finished result was a look that blended with the rest of the house and looked like it was an original component.

  • Here are the materials I used:
  1. Furring strips cut the length of the back wall and shorter furring strips for the sides.
  2. Stud finder for locating studs to which I attached the furring strips.
  3. Screws and screw driver.
  4. Pre-cut shelving purchased from a lumber yard was then set on top of the furring strips.
  5. Enamel Paint.

 

  • After the shelving was in place, here is how I finished the project:
  1. Measured width and height of space.
  2. Ordered two sets of maple cabinet doors (upper and lower) from a cabinetmaker.
  3. Installed the doors.
  4. Installed trim to conceal gaps and put rosette squares in the corners so I didn’t have to miter the trim.

Later that fall, I stood outside on my balcony, admiring my yard. I the number of boarded-up windows on the block and said to myself, “If I stay here until spring-time, I’ll probably get shot.” It wasn’t the safest neighborhood in town. Besides, I had always wanted to move near the lake.

The Payoff

I sold this house four months after I bought it for a $10,000 profit. I also sold my first house, which I had converted to a rental. Armed with cash, I set out to find my next fixer.

 

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Buy, Fix, Sell Pt. 1

Could You Remodel a House?

In case you’re thinking I had a lot of experience, I did not. I thought that electricity was magic, and I did not own a single power tool. I knew I was clueless; I sold houses, I didn’t fix them. So I bought a Reader’s Digest Handyman Repair book, which explained what kind of tools to buy and gave detailed instructions on all kinds of repairs such as how to unclog a sink, replace a receptacle, patch a hole in the wall — even how to frame a closet.

How to Get Started

  • Buy books on home remodeling / maintenance.
  • Talk to contractors and handy person specialists.
  • Tour recently remodeled homes for clues and ideas.
  • Go to home improvement shows.

My First Remodeling Projects

  • Uncovered & refinished the oak floors.
    First time around, this was not a job I did myself. I hired pros, after calling a dozen floor refinishers. Here is what I learned:
  1. Think before moving furniture so exits are not blocked by stacked furniture.
  2. Rolled carpeting is very heavy to lift.
  3. If you throw carpet out the window, you will scratch the window ledges. It is better to leave a path to the door.
  4. Finishes vary and that will affect the price.
  5. Oil-based polyurethane has an amber hue and is very durable.
  6. Water-based polyurethane is clear and easy to clean up.
  7. Polyurethane finishes require three coats minimum.
  • Laid ceramic tiles.
    To avoid cutting tiles, I laid out a pattern for the front porch entry that utilized full-sized tiles. Around the ceramic perimeter, I installed peel and stick carpet tile, which I cut with a regular pair of scissors. Then I covered a kitchen counter in ceramic. This is what I learned about ceramic:
  1. Shopping for sale prices can save a lot of money
  2. It costs less to mix your own mortar and grout than to buy premixed.
  3. Never mix more mortar than you can spread in 30 minutes.
  4. Adding latex to thinset will help to strengthen the bond.
  5. Always wash tools promptly and dry them.
  6. The back of a toothbrush helps to smooth uniform grout lines; if you use your fingers, they’ll be raw.
  7. Buy big sponges, rinse often and squeeze dry when wiping grout film.
  8. If you are cutting only a few tiles, you’ll save money if you take your tiles to the store to be cut (over renting a wet saw).
  • Installed ceiling fans.
    Ceiling fans are easy to install, and anybody can do it. The biggest decision you will face is whether to mount the ceiling fan against the ceiling or drop it from a stem. Here is what I learned:
  1. Always turn off the electricity to the house from the main switch. Don’t rely on a circuit breaker, turn it all off.
  2. Buy an electrical tester.  Testers are cheap, about $10. Your life? Priceless. Always make sure that there is no current running through the wires.
  3. Black wires are hot, white wires are cold, copper wires are neutral.
  4. Needle-nose pliers can twist wire nuts if your fingers are too sore.
  5. Always make sure your wires are secure and tight inside wire nuts.
  6. Just because screws and plates come in the box doesn’t mean you can’t use what is already in place in the ceiling.
  7. Remove your existing light fixture before buying a fan so you can be certain the new mounting hardware is large enough to cover the hole in the ceiling.
  • Painted bedrooms and bathroom.
    Stains from cigarette smoke and water stains on walls or ceilings will bleed through fresh paint. First, cover areas with a stain blocker. Here is what I learned about painting.
  1. Do not use a paint tray. Instead, buy a 5-gallon bucket and paint screen. This way you won’t ever step in the paint.
  2. Mix together all your cans of paint and pour back into the cans. This ensures uniform paint color.
  3. Buy quality paint brushes. You can’t spend too much money on paint brushes.
  4. Thoroughly clean brushes with a wire brush immediately after use, let dry and store. They will last a lifetime.
  5. Lightly sand between coats (use 150-grit or higher). This removes burrs, defects and any grain that rises.
  6. Always do two coats of paint.
  7. Paint under bright lights so you can see drips.
  8. Test all paint colors first.
  9. Buy high quality paint.
  10. Take an extra day to fix painting “mistakes” where paint has dripped or dribbled on other surfaces.
  11. Wear old “painting” clothing, preferably white, cover your hair and wear latex gloves.

The Payoff

I bought this house for $40,000 and sold it for $58,000 a year later. I wasn’t planning on selling it, but it had too much equity to sit on. Besides, I had my eye on a bigger house just up the street a mile or so. A better neighborhood, or so I thought.

 

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How To Find A Good Realtor

 Real Estate Agent Giving Key to Home Buyer

You’ve seen the “For Sale” signs and you’re anxious to buy a home. But, how do you navigate all the various kinds of home loans and figure out how much house you can really afford? Plus, how will find out the inside scoop on each home and how to submit an offer? A real estate agent can help you with all of these decisions and more.

Real estate agents work to make buying and selling houses easier for the general public. As experts in the local real estate market where they work, agents can make a difficult transaction worry-free for you. Unfortunately, some people still say that real estate agents are a “dime a dozen.” This doesn’t mean that the profession is full of lazy or incompetent people, but there’s no denying that some real estate agents do a much better job than others.

So, how do you find the perfect real estate agent? Start by checking credentials.

The Realtor Difference

There are many active real estate agents, but not all of them are “Realtors”. To use the term Realtor, a licensed real estate agent must also be a member of the National Association of Realtors. This requires additional training above the licensing requirements that all agencies must meet.

Realtor’s:

  • Complete ethics courses and exams, and
  • Make a commitment to uphold the association’s ethics standards, which are more stringent than both federal and state laws.

Realtors also hold themselves to higher standards regarding client rights. That means when hiring a Realtor, you’ll ensure you have a trustworthy professional on your side. You can do this by asking friends for referrals or searching for local Realtor’s in your area on Google.

Interviewing Prospective Agents

The next step is to call any Realtor you find through word of mouth or advertisements and conduct an interview. The Realtor will be working for you, so you’ll want to be comfortable with her personality, energy level, typical work hours and plan for helping you find the perfect home. Also ask how many properties she owns. If the answer is “none,” you might want to keep looking. Realtor’s who own at least one property may have special insights based upon their personal experience. Find out how many years she has been a Realtor and the type of property and area of town in which she specializes. (The more frequently the agent works in the areas and/or with the kinds of properties you want to buy, the more helpful she’ll be). Make sure he is a member of the MLS (Multiple Listing Service) as well, as that will give you access to the most homes that meet your criteria. You may even want to meet the Realtor face to face before deciding if he/she is the right one for you.

Before you sign a contract, check the Realtor’s history to be sure there are no legal or ethics violations on her record. You can do this by going to the Department of Real Estate website for your state. For example, search for “California Department of Real Estate”. You’ll see a link which says, “Look up Agent’s License,” or something similar. Enter the Realtor’s first and last names, or the company he/she works with.

Get Down to Work

Once you interview the Realtor and checked his/her background, you should be ready to make a decision. If you have a difficult time choosing between two Realtor’s, make a “pros” and “cons” list. What did you like, or dislike about each? When your final decision is made, you’ll need to meet with the Realtor to sing an agency contract. The contract states that the Realtor is working for you, for the purpose of finding a house which meets your criteria.

Be prepared to tell the Realtor your criteria. He/She needs to know how many bedrooms and bathrooms you’d like, the area of town you prefer, any special amenities you’d like and, of course, the price range you can afford, and have been pre-qualified for. If you haven’t received a lender pre-qualification for a loan, the Realtor should be able to give you references for qualified, honest lenders whom she has worked with previously. After completing these steps, you’ll be ready to look at houses, submit offers and purchase the perfect home.

 

Get a Copy of My Free Ebook: Buying By The Book

Is It Time To Buy?

MarketWatch’s David Weidner checks in on Mean Street to point out that changes in the economy’s housing sector indicate it’s time for prospective homeowners to sign on the dotted line. Photo: Agence France-Presse/Getty Images.

Warren Buffett famously once said: “Be fearful when others are greedy, be greedy when others are fearful.”

And if you’re not instinctively scared of the housing market, then global warming, saturated fat, running with scissors and the bogeyman probably aren’t keeping you awake at night, either.

The fact that everyone is scared to dabble in—much less commit to—housing makes it a close-to-perfect investment based on Mr. Buffett’s principle. But buying real estate is a good long-term investment for many more reasons, some of which have only become apparent in recent weeks.

The most striking: Housing prices rose sharply from April to May. The S&P/Case-Shiller Index rose 2.2% in 20 of the nation’s big cities. Prices shot up more than 3% in Chicago, Atlanta, San Francisco and Minneapolis. Even Detroit’s housing market scored a gain, inching up by 0.4%.

Nationally, the increase was the first in seven months. More importantly, the increase matched other data and empirical evidence this spring that foreclosures slowed and inventories were shrinking. Simple economics suggests that as the supply of distressed property slows, buyers will be forced into higher-price properties.

In addition, interest rates on 30-year fixed mortgages have tumbled below 3.5%. For those who can get credit, these aren’t just historically low rates; they are one-sided deals tilted toward borrowers.

Other good signs: Housing starts rose 6.9% in June. Home-building stocks are on the rise, with the Philadelphia Housing Sector Index up 27% so far this year. And for those who can invest in property, rents continue their ascent. Prices are at a 10-year high, with the median unit renting for $710 a month. Real-estate website Trulia found that it is cheaper to buy than rent in each of the nation’s 100 biggest metropolitan areas.

In other words, if you can buy a home today, you can save the difference it would cost you to rent even if you stay in the home just five years. If you can buy a property and rent it, it is almost certain that the rent will cover the cost of the financing—and the property will appreciate.

Here’s where the fear comes in. From 30% to 50% of existing mortgages in the U.S. market are underwater, depending on the estimate. That means many borrowers are trapped in their homes and loans. They either can keep paying and hope prices will improve or walk away, putting downward pressure on home prices.

Foreclosure rates have leveled off, but market analysts believe an increase is likely.

Here’s why. Since the financial crisis, 3.7 million homes have been foreclosed on, but an additional 1.4 million remain in the national foreclosure inventory, according to CoreLogic, a real-estate research firm.

Finally, a housing recovery won’t happen, or could be snuffed out, by a rotten economy. There’s never been significant growth in housing with high unemployment. And as Dow Jones’s Kathleen Madigan noted, “Potential buyers must feel secure with their job prospects before they commit to long-term mortgages. Higher loan standards mean banks want to see an applicant’s solid income history before lending.”

There is plenty to be afraid of when it comes to home buying. But in the current investing climate, housing presents an attractive long-term investment that should hold steady or even have upside surprise in the short term.

Fixed-income yields have fallen to historic lows, and the stock market has traded in a range, rising and falling skittishly on jobs, growth data and the news from Europe.

Recently, I was forced to choose between renting and buying. I decided to buy because it offered immediate monthly savings compared to renting, not to mention a mortgage-interest deduction.

So this is at least one case where I’m putting my money where my keyboard is.

Mr. Buffett would remind us that investments of any kind are not without risk. Each should be considered with the investor’s time horizon and appetites. But he also has acknowledged that real estate is especially attractive when financing is cheap, there is pent-up demand and prices have been driven down by a spooked market. Put another way, it’s time to be greedy.

 

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