Open House Safety August 8, 2008

Recently I was hosting an Open House at a high end condo and noticed a very strange looking individual, he was dressed in a white linen suit and was wearing a Red Sox Baseball cap and wearing sunglasses, even while inside.  He was of medium hieght and a slightly stocky build.  He signed in on the register but it was illegible.  He moved quickly through the house and then left without saying much to me.  It was a busy Open House so I didn’t think much of it until later when I spoke with the Realtor holding an Open House just down the street from me.  She told me he has been to 3 of her Open Houses in the last month and that the price ranges were from 250-800K.  This is definitely not someone looking to buy a home. 

A few weeks later at my office meeting another Realtor brought up the same man, white suit, baseball cap, lurking around her Open Houses again in different price ranges.

Here’s what we believe, there are people going to Open Houses in search of prescription drugs, or any personal information they can get.  Credit cards, unopened mail, social security, even valuables.

If you are selling your home, always remove all valuables and prescription drugs for an open house.  It’s not as important for regular showings as the Realtor will always be with the buyer, but for an open house, if there are more than 2 people in the house at the same time the Realtor may not be able to keep tabs on everyone.

If you are a Realtor, advise your sellers to take caution.  And ALWAYS have your cell phone with you and make sure people know where you’re supposed to be and check in with someone when you leave.

If you get notice that your mortgage has been sold July 2, 2008

call your lender and make sure that your mortgage has indeed been sold.  Until you get a letter from both lenders advising that your loan has been sold (or assigned), you should continue to pay the first lender.  This is a problem now that so many banks and lenders are having to close their doors, but also opens up the door for new scammers to try and collect mortage payments from the unsuspecting homeowner.

When in doubt, make the call!

Getting Ready to Move? Have a Garage Sale! June 8, 2008

I found this helpful information on my cousin’s real estate website : http://agent.interorealestate.com/splash.aspx?ID=3254

We find that many families use a change of residence as an opportunity to dispose of many outgrown and no-longer-wanted items. It beats taking the items with you and can even put several hundred dollars in your pocket toward buying furnishings for your new home. As Realtors®, we are expected to be wise in all matters relating to a change of residence. Even though garage sales are far from our primary field of expertise, allow us to pass on the best advice we have picked up over the years. Planning Allow plenty of time – three to four weeks – to prepare. Choose a date that will not conflict with holidays or other events that might lure prospective customers away. More people are likely to show up on weekends than weekdays. Your sale is likely to attract more customers if you join together with neighbors in a larger effort with more merchandise – some homeowner groups sponsor neighborhood sales that are proving popular. What to Sell Practical household goods, bicycles, children’s toys and clothes, sports equipment and garden tools are popular. Adult clothing has less appeal – price accordingly. All items should be clean, polished and in good repair. Display Merchandise your items attractively in neat, clean surroundings. Paper tablecloths offer a pretty setting for glass and ornamental items. Cluster things in categories. Place more desirable items toward the back so browsers can notice other merchandise on their way to the most popular items. Have a 25-cent miscellaneous table for young shoppers. Clothes should be sized accurately and hung on a temporary rack. Logistics Locate your appliance table near an outlet so customers may try before they buy. Set aside adequate parking and a place to load large items. Have plenty of bags and boxes on hand for packing and newspapers for wrapping glass items. Ideally, a place for trying on clothing should be provided. Promotion Place a classified ad in the local papers – include three or four of the more tantalizing items for sale, directions and other pertinent details (you may or may not want to include your phone number). Take advantage of free publicity provided by bulletin boards in grocery stores and other public places. Provide directional signs to your property using an indelible pen. If your house is listed for sale, have your Realtor® hold an open house on the same day, thus increasing traffic for both the house and the sale. Pricing Visit other sales to get an idea on how to price things. Remember that garage sale shoppers are looking for deals, so be prepared to bargain and lower your prices. Really valuable items such as antiques should not be sold at a garage sale; they are not likely to bring the desired price from bargain hunters. Nothing is too worthless to be valuable to someone, so have a giveaway box for old magazines and other assorted odds and ends. Staging Post a notice that all sales are final and payment must be in cash. Keep ample change in a cash box in a protected spot. Keep a record of sales, especially when there are several sellers. One recording method that is simple and efficient is to use small adhesive stickers to price items, then transfer the sticker to the name of the seller when the item is sold.

Top 10 DIY oops! June 5, 2008

Top 10 DIY mistakes by home ‘handymen’

By Pat Curry • Bankrate.com

 

The first thing any savvy do-it-yourselfer should take into account when considering a new project is that it will probably take twice as much time and three times as much money as you thought.

Or maybe it’s three times as long and twice as much money.

Either way, there’s a good reason why it’s true: DIYers make mistakes.

Lots of them.

But you can learn a lot from mistakes. For example, whatever it was that my husband did to make all the outlets in the kitchen blow at the same time — don’t do that again. The bad news is that mistakes always wind up making your home-improvement project more expensive and more time-consuming than you want it to be.

With that as a given, we asked home-improvement experts around the country for the most common mistakes they see.

1. Not taking out the required permits. Considered a bother at best by many DIYers, permits actually serve a greater purpose than just raising money for the government. “People in permitting offices aren’t evil,” says Lou Manfredini, the official Ace Hardware “Helpful Hardware Man.”

“They’re there to make sure the job is done right and you don’t hurt yourself.” Plus, for some jobs, such as putting in a wood stove, you need proof of the permit or your insurance carrier won’t cover it. Not sure if your job requires a permit? The rule of thumb is that you need one for anything larger than painting and wallpapering. It doesn’t hurt to call the building department and ask.

2. Starting a job without the necessary tools and supplies. Nothing slows down a job more than not having all the materials you need. Manfredini says the reason the pros can do what they do is that they buy quality tools. “There’s always a bargain bin,” he says. “It’s not a wise investment. You lose time and money.”

3. Inadequate preparation of the job site. If you do a small addition, suppliers will be delivering materials. You don’t want them out of order or exposed to the weather while you are working, says Ed Del Grande, host of the DIY Network’s “Warehouse Warrior” show.  Beware: They could be stolen if they’re not properly stored. (If you have a septic tank, make sure you know where it is. If a supplier delivering materials in a heavy truck drives over it, you could be looking at a cracked tank. Yuck.)

4. Skimping on materials. Barbara Kavovit, owner of Barbara K Enterprises in New York, says she often sees DIYers use 1/4-inch drywall for building walls instead of the minimum 5/8-inch or 3/4-inch if you want a good sound barrier. The same rule applies to plywood for subfloors. Go with 3/4-inch. It creates a much stronger floor, especially if you’re installing wood floors over them.

5. Using the wrong paint. One of the biggest DIY projects around, painting can make a place look great. Manfredini says flat paint should only be used for ceilings because it’s usually not as washable as paints with an eggshell or satin finish.  On outdoor decks, “sun and rain tear the heck out of the wood,” he says. Clear sealers don’t block the UV rays, and they peel. Use a linseed-oil-based stain — it drives the pigment into the wood and preserves it.

6. Improper preparation of walls for painting. A good, quality paint job is 90-percent preparation, Manfredini says. Clean the walls, sand them and patch any holes before you paint. A coat of primer or stain blocker is advisable if you’re trying to cover over oil-based paint, stains or peeling paint, or if you’re painting a lighter color over a darker color.

7. Unsafe job conditions. Nothing diminishes your return on investment like a trip to the emergency room. Wear safety goggles when using power tools or working with drywall or wood; wear hard hats when you’re working under other people on scaffolding; and open some windows when you’re painting or staining, or stripping old finishes off of floors or walls, Del Grande says. And don’t wear loose-hanging clothing, especially when using power tools. Wear gloves when carrying wood, metal and rock, or when hammering, and wear a nail or tool pouch to prevent damage to your floors and more importantly, the feet of people and pets.

8. Inaccuracy. Successful DIYers live by this rule: Measure twice, cut once. It’s so important for things like building walls, hanging drywall or cutting baseboards, countertops or pipe. If you’re going to err, err on the side of too long. You can always make something shorter; you can’t make it longer. Spackle can cover only up to a 1/8-inch seam.

9. Working beyond your limits. Everybody has them. Del Grande won’t work on a roof; yours might be plumbing or electrical work. Don’t stand on the top steps of ladders, and don’t try to work beyond your reach. Ladder accidents send more than 164,000 people to the emergency room every year, according to the U.S. Consumer Product Safety Commission.

10. Failure to get a clue. You don’t want to start to learn how to do a project on your own house. If you have a friend who is a contractor or an experienced DIYer, offer your assistance on one of his projects so you can learn. No one will turn away free labor. If you need to remove a supporting wall, have an engineer look at it to see what kind of beam you need to replace it. “If you have a saw in your hand and have a question about what you’re doing,” Del Grande says, “stop. Follow that little voice in your head.”

Home Equity Is NOT Your Savings Account! May 21, 2008

I saw this article and thought it good to pass on, especially with the times the way they are.      Home equity is not your savings account
By Melissa Ezarik • Bankrate.com
Thanks to the real estate run-up of the past several years, you’re sitting in a $500,000 home that you owe $50,000 on. Wow, you’re rich. You’ve got $450,000 in home equity! So what if you have no savings? You’re sitting on a pile of cash. Not so fast. “Most Americans these days have more money invested in their homes than all their other investments combined, says Peter J. D’Arruda, author of “Financial Safari.” That kind of thinking could be financially dangerous. “If you put too much into your house, the bank has control over that money,” D’Arruda says. When a financial crisis hits and you need that equity most, the bank may well not give you what’s yours. Dave Ramsey, a radio talk show host and author of “The Total Money Makeover,” points out that the banking industry called home equity loans “HELs” for short. “My experience tells me they simply left off an “L.” These loans are dangerous and an unbelievable amount of them end in foreclosure,” he says. Those who do draw on their home equity may find that their home values could fall — perhaps lower than what they’ve borrowed against. If you find yourself in a financial crisis, and can’t make the payments, you could wind up in foreclosure and lose all the “savings” you thought you had, D’Arruda says. Something similar happened to a couple Ramsey calls “Ed and Sally.” Their home equity line, used for emergencies, was not renewed by their bank after Ed lost his job, and they got behind on their bills. This is despite their credit having been perfect for 17 years prior to the situation. Ed and Sally had to sell that home to avoid foreclosure. “It is clear that many folks are spending more than they are earning, and home equity is a source of that excess consumption,” says Richard F. DeMong, the Virginia Bankers Professor of Bank Management at University of Virginia’s McIntire School of Commerce. DeMong, who is an expert in home equity and mortgage lending, notes that when a home is the primary source of savings it won’t be available during retirement as money that one can use to live — unless the home is sold and a smaller, less expensive one is bought. That option doesn’t appeal to many. Still, DeMong sees home equity loans and lines of credit as useful for home improvement projects — since they increase the value of the home and thus the value of the home equity — and for dealing with temporary emergencies. “However, for longer-term emergencies, such as a permanent disability, (home equity) is not as helpful, since you will no longer have the equity for retirement or other needs,” he says. Relying on your home equity as savings can be a dangerous idea. Here are some scenarios that make clear the dangers:   • For years you count on the equity in your home to pay for your child’s college education. But just as high school graduation approaches a stock market crash or an oil embargo creates fears and sends interest rates soaring to more than 18 percent, as happened some 25 years ago. Almost better to use a credit card! • You live in an area where home prices have gone through the roof, but a real estate “bubble burst” makes your home worth less than what you paid for it, meaning there is no home equity to use. • You become subject to the alternative minimum tax (which increases your tax bill by knocking out a lot of exemptions, deductions and credits). The interest on a home equity line of credit is no longer tax-deductible, significantly reducing its feasibility. • Congress changes the rules on home equity loans. For instance, government-backed mortgages could require homeowners to keep a certain amount of money in home equity to reduce the chance of foreclosure, says investment expert Jeff Harris. This could reduce or eliminate the amount available for equity loans. Or banks could be forced to tighten eligibility requirements by the Federal Reserve, so perhaps you wouldn’t qualify for a home equity loan, even if your income remained the same. Bottom line: Home equity or not, it’s still important to save.

Is there such things as a second chance? May 6, 2008

First impressions are often lasting impressions– particularly when a home buyer looks at a property. If a home doesn’t look good from the outside, chances are potential buyers will never walk through the door.

Well-maintained grass, trees, shrubs and flower beds are just the beginning. Plant some blooming flowers. Give your front door a fresh coat of paint and a new doormat. Make sure the doorbell works! Keep toys, bicycles, hoses, etc. out of sight. If you have an asphalt driveway, put a fresh coat of sealer on it. Create a solid, well-cared-for look and buyer traffic will follow!

Best Buyer’s Market in 35 years May 3, 2008

In April of 1973, mortgage rates were about the same as they are today. Since that time, we have only had mortgage rates this low during 2001 and 2002, the height of the seller’s markets where there was little inventory.

In the last two major buyer’s markets, one in the early 1980s and the other in the early 1990s, the rates were much higher. In 1994, interest rates were at 9.5 percent, (and they were at 18 to 21 percent in 1980). In the early 1990s, the rates were hovering in the 11 to 12 percent range. Thus, today’s buyer’s market, with exceptionally low mortgage rates plus a substantial supply of inventory, is the best time in decades to purchase. Source: Imman News

What Every Agent Should Know About the Credit Markets April 25, 2008

In this ever changing lending environment, realtors will need to keep a few key things in mind:

 

Pre-approvals

 

Be sure your buyers update their pre-approval letters every 2 weeks. Loan program changes and rising rates may negatively affect how much they can buy.

 

Property

 

As lenders face loses to foreclosures, they are focusing more on the condition of the property, as well as, the comparable sales to support value.

 

Government loans such as VA and FHA have strict guidelines for wells, septic and overall condition of the home. No deferred maintenance such as peeling paint, missing railings, etc.

 

Foreclosed properties will need to have the utilities on, and all appliances.

 

Appraisal underwriters are taking more time reviewing appraisals. A few months ago, a report passed through underwriting in 2 days, it can now take 2 weeks!

 

Stay Positive

 

Remind yourself and your clients that we are not in a crisis. Lenders are just taking more time to make sure people can afford the home they are purchasing.

 

Allow at least 45 days for a loan to close to minimize stress.

Touching Testamonial April 17, 2008

Recently I emailed all my past clients to see if they would write a quick note on why they liked working with me.  This was one of the responses that really moved me.  I hate to brag, but I’m gonna anyway. 

Allyson,
 
What can I say, but you are a trusted person in my life.  You took on my personal needs in selling my home with the market crashing around home buying.  This alone was not an easy task for you or for me, you helped me with keeping faith in my ability to present my home to others as I had invisioned it completed.  And most of all to find the right fit, by having a family purchase the home and will have love in it is more than I can express in words. 
 
You also gave me sound financial advice when I was almost at the end of my rope with the burden of mortgage, taxes, etc.  You kept in constant contact with me regarding showings and worked around my schedule of working the graveyard shift while trying to get some shut eye to see me through another day.  I cannot give you more praise than to thank you for letting me see that letting go was the best thing to do and I was making the right choice by selling my home.  I really could not have afforded to spend another month with the financial burden that divorce and other bumps along life’s road had given me. 
 
Your e-mail with the lighter side of you gave me more insight into who you really are and more confidence in your ability to see things through.  You said to me the first meeting that I am here to help you and not just to make money.  I will always keep your best interest in mind and you honored your word in every manner.
 
The professionalism you showed, by not giving me the buyer’s letter until I had made my own decision gave me the respect I needed as the home owner.  I found this a touching letter as you did and was relieved to have you give it to me after we had crunched the numbers on what all of us could afford and live by.  You had patience when I could not comply with all the showings and worked around my unstable schedule. 
 
Again, my biggest dream was to have someone love the home I had worked so hard to create, and to have a wonderful family with so much love move into it and call it home was the greatest gift to lift my spirits.  Thank you again for being there as a professional and a trusted friend.
 
Suzan

Appraiser Reality Check April 15, 2008

Property appraisers are supposed to give fair and accurate appraisals of a home’s worth. To do that, they examine a home and its assets. They then compare that to other homes in the neighborhood and what those homes are worth. It’s similar to the process most real estate agents use to help the seller arrive at an asking price for a home.

However, the buyer, seller, and lender all want the appraisal to match or exceed the agreed upon selling price. This is where potential problems arise.

A 2007 study by October Research reported that nearly 90% of appraisers in the survey reported pressure to inflate values from lenders, real estate agents, mortgage brokers, borrowers and others. In fact, three-quarters of the appraisers stated they felt that if they didn’t cooperate, they expected negative ramifications from fewer referrals to total loss of business.

Taken on a home-by-home basis, a little fudging on the part of an appraiser to make the buyer, seller, lender, and agent for a home all happy, may not sound too terrible. However, according to a study cited in an article by Curtis Seltzer, in 2006 these over-appraised homes added up to approximately $135 billion in non-existent, additional value.

With the housing market struggling, these problems could very well increase. While a false appraisal makes everyone feel good about a home transaction, in the long run it can lead to more foreclosures and lower property values.

There are state and federal laws that appraisers must follow and ethical appraisers do just that. However, the pressure to over-appraise is strong, and unethical appraisers are the ones who benefit by giving in to that pressure.

The Fair Market Value for a property should be just that; pressuring appraisers to deliver anything else is bad business for everyone.