A Foreclosed Home May Require Some Rehabilitation

Earlier, I wrote about the possibility that the disgruntled former owners of a foreclosed home may vandalize the property. Well, there are other dangers, ones that are not necessarily done on purpose or with intent to harm.

Since they are left empty with no one to perform maintenance, foreclosed homes can get into rough shape. The grass can grow long and wild. And now people are discovering that foreclosed homes are also very attractive to insects. Homes with pools or flower pots or other receptacles fir water are especially prone to become insect breeding grounds.

Also, homeowners who have to abandon their homes after foreclosure tend to leave the homes empty. This makes it an even more inviting space for insects and animals.

I mention this not to scare you, but to prepare you. If you go to look at foreclosed properties, be careful. If you decide to purchase one, you must factor in the rehabilitation that may be necessary to make the property livable again. Consult with experts to make sure that you are doing all you need to do to make the property safe.

Minor vs. Major Kitchen Renovations

If you are considering a remodel of your kitchen, you may want to go smaller rather than bigger.

Why? Because according to industry experts, a minor kitchen renovation will bring a bigger return than a large-scale one. That is not to say that you want get any kind of return on investment with a big kitchen overhaul. It is just to say that it seems that buyers are more amenable to minor kitchen renovations.

This notion may seem odd in our bigger is better society, but there are some rather logical reasons why this is sometimes the case. A major kitchen remodel may be overwhelming for some buyers. If you are a serious cook and want to re-do your kitchen for your own benefit, you should. But if you want to create an entirely new kitchen for re-sale value, consider carefully. You just don’t know who will be considering your home. It could be someone who loves to cook or it could be someone who only steps in the kitchen to put leftovers from takeout in the fridge. Such a major renovation may mean you'll be pricing your home far above the other houses in the neighborhood.

Summer Lawn Care

Whether you have a small square out front or expansive greenery surrounding your home, you need to think about how to keep it looking good during the summer. Summer is a busy time and it is easy to leave the lawn to itself.If you don’t take care, your lawn will be dry and parched because of the heat.

Water your Lawn
Yes, that seems elementary, but summer is a busy time. Sometimes people figure that there has been enough rainfall to keep their lawns well-watered. What they forget is that the higher temperatures in summer mean more evaporation. A lot of the water you think is reaching the roots is really evaporating. So don't forget to get out the hose and water your lawn. Or, remember to make good use of your sprinkler system.

Choose the Right Fertilizer
If you go out and buy the first fertilizer on the shelf, you may be in for a surprise this summer. Fertilizers contain nitrogen. When the temperatures rise in the summer, the nitrogen will react to the heat. It will burn you lawn and you don't want that. Pick a fertilizer that is low in nitrogen. There are also slow-release fertilizers that reduce the chances of heat and nitrogen damaging your lawn.

Harmful Chemicals in Paint

Many years ago, people realized the dangers of lead paint. Lead paint was a staple in homes that were constructed before 1978. The lead in that paint, chips of paint and dust produced by lead-based paints was discovered to be dangerous to a person’s health. We stopped using it and started testing for it so it could be removed from places that had used it.

Today we are seeing that even without lead, paint still contains harmful chemicals. These chemicals, called volatile organic compounds (VOCs) are released into the air after you paint. Formaldehyde and other carcinogens are among the VOCs identified in paint.

The good thing is that there are new paints available that are being with low levels of or completely without VOCs. These paints contain resins, minerals, plant oils and pigments made from vegetables.

Several mainstream manufacturers make these paints, so they are not hard to find. YOu can check the label on a can at paint to see just what level of VOC it has.
The bonus of taking the time to find paints with little or no VOCs is that many of them do not have the "new paint" smell.

What is Forbearance?

One of the ways to avoid foreclosure is to enter into forbearance.

If you agree to enter into forbearance, you will have to pay larger monthly payments in order to make up for the payments you missed. A typical payment under forbearance would be one and a half times the former monthly mortgage.

You will also have to make a large payment at the onset of the forbearance agreement. It is a down payment of sorts, a way of showing the lender that you are committed to keeping the property.

Forbearance does not last forever. It is a way for you to get caught up on payments and reassure the lender that the loan will be paid off. Usually, a lender will require that you make up for missing payments within 12-18 months.

For some who are already having trouble making payments, this method may not be a solution, but it has worked in certain situations. If you ran into some financial trouble, but have managed to pull yourself out of it, then forbearance may allow you to avoid foreclosure and stay in your home.

Lease-to-Own, part 2

In the last post, we gave a brief overview of what it means to enter into a lease-to-own agreement. Now let’s talk about more of the pricing and payment details surrounding such agreements. A lease-to-own contract can be just as (or maybe even more) complicated as a traditional real estate transaction.

Just like layaway, rent-to-own and other situations where you are paying on installment, the buyer in a lease-to-own agreement must agree to purchase the property by a certain date. Lease-to-own agreements can last anywhere from six months to a few years.

When you lease-to-own the money you pay each month is not a mortgage. Instead, you pay a rent and some of that rent will be used to cover the price of the house. There is technically no down payment in a lease-to-own agreement, but the buyer does give the seller an agreed-upon sum once the contracts are signed. The sum is known as "option money" and more often than not the seller keeps this money if the buyer ultimately decides not to go through with the purchase of the property.

Lease-to-Own, part 1

You've likely heard of rent-to-own furniture and appliances--plans where you pay periodically for a couch or large tv set over a certain amount of time until you own the item. Did you know that some people offer the same option for houses?

If a seller finds that their home just isn't selling they may decide to go this route. Also, sometimes a seller may offer this option to a buyer who is having a hard time getting financing. This way the buyer still has the opportunity to buy the property.

As with any real estate transaction, a lease-to-own agreement calls for a lot of thought and a consultation with a real estate professional. The two parties involved negotiate the terms and sign a contract that is legally binding.

In a lease-to-own agreement, the buyer is not the owner, but they are not a renter either. If you decide to enter into a lease-to-own agreement as a buyer, you will have to take charge of the maintenance and property taxes on the home you are leasing.

Check back on Monday for more on what happens during a lease-to-own situation.

Paint Away Problems

One way to deal with rooms of an unusual shape is to paint them. Before you start to knock down a wall or make an oddly-shaped room into a storage space, you may find that paint will cover a multitude of problems.

-If the ceilings are low, you can use the same paint for the baseboards and the walls.

-If the room has no windows, try painting it in a light color, using pain that will reflect light. Notice that you are advised to use a light color, so you don't have to use white. A color will give the windowless room more warmth.

-If the room somehow seems short, use a cool color on one wall and a warm color on the rest to create the illusion that the room is longer than it really is.

-If, on the other hand, the room feels long, then do the opposite: paint one wall in a warm color and paint the rest in a cool color. This will make it feel as if one wall is closer to you that it really us and take away from the feeling that the walls are so far from each other.

What to do When Water Damages Your Home

Right now Maryland and the DC area are experiencing heavy rains. As important as water is to us, we know that there are times when too much of it in certain places can cause all kinds of trouble. Here are some of the first steps to take in the event that heavy rains, a storm, or even a previously hidden leak have caused your dwelling to be exposed to large amounts of water.

If your home has sustained significant water damage, you should:

First decide if your home is safe enough for habitation. Is there any standing water?

Call your insurance company to inform them of the damage.

Turn off the power in your home.

Shut off the natural gas supply line.

Turn off the main water supply.

Look for any broken electrical fixtures and exposed wiring.

Look for damage to plumbing connections and pipes.

Look for problems with tree limbs or power lines.

The more quickly you act, the better. Fast thinking can prevent more damage and keep you from losing valuable assets to water damage.

Touring Foreclosed Properties

Listening to the radio, I heard an ad for foreclosure listings. The ad promised to give you a list of great properties in your area that you could purchase at bargain prices. In other ads, I've heard them even give you examples of very low mortgage payments for houses that sound like palaces.
If you are thinking about buying a foreclosed home, these lists are one way to look for a property, but they may not be the best way.

If you want to learn about a number of foreclosed homes, consider taking a bus tour. That's right, a bus tour. If you haven't heard already, realtors are teaming up to give tours of foreclosed properties to prospective buyers. When you take one of these tours, you are not left to decipher a list of properties; instead you are actually seeing the properties themselves. And you have the added advantage to being shown around by real estate experts who can answer your questions and provide some guidance about buying a foreclosed property.

If that isn't enough, you also have the advantage of having someone else do the driving.

Space Savers, part 2

In the last post, I discussed ways to make your home feel roomier. Here are more tips on how you can make the most out of the space in your home:

Climb the Walls
If the floors are pretty much covered, then it is time to look up. Yes, your walls are just waiting to be used. Think about vertical shelving. There is vertical shelving that is both useful and decorative.

If you are shopping around for a new TV, why not get a flat screen model that you can mount on the wall. That will free up space elsewhere.

Double Duty
Get furniture that does more than sit. Furniture designers are making furniture that can be used in more than one way because they know that we all have so much stuff. There are ottomans with space for blankets and beds that come with drawers underneath.
Speaking of underneath, manufacturers are making all kinds of appliances and machinery that can go underneath a cabinet. There are now microwaves, radios, CD players and can openers that can be installed under a cabinet, leaving you with more kitchen counter space.

Space Savers, part 1

If you are feeling cramped in your house and wonder just how you can maximize living space, there are things you can do.

First, you can decide that you will take some time to look at the space, consult experts as needed, and make a plan. Having a plan will keep you from running to get the first product that promises to organize your life. Often, these products end up adding to clutter, rather than detracting from it.

In fact, some people find it helpful to take a fast from buying objects for the house for a short period a time (a month, or a week if you cannot last a month). This will allow you to take stock of what you have and perhaps consider what you can throw away. Or you may see how things can be shifted to give a part of the house a less cluttered feel.

You may find that something you already have can be put to another use. Nowadays this is called "re-purposing," but the idea has been around since time began.

Check back on Wednesday for more ideas on saving space.

Foreclosure Affects the Famous, Too

If you haven’t heard, various media outlets are reporting that baseball player Jose Canseco has lost his home to foreclosure. He was quoted as saying that it didn’t make “financial sense” to keep his home, a home he most likely purchased when he was still making a baseball player’s salary. He also said that for him, foreclosure was not difficult to deal with on an emotional level.

Mr. Canseco is certainly not obligated to be a role model of any kind for the American public, so he cannot be chastised for what appear to be rather nonchalant comments about a very serious situation.

If it doesn’t make financial sense to keep your home, other arrangements can be made before it goes into foreclosure. You can talk to your lender and seek the advice of real estate professionals. You can attempt to make an arrangement to stay in your home or you can take measures, such as a short sale, to sell the property.

It is good that Mr. Canseco does not feel emotionally torn about losing his home to foreclosure, but many people cannot say the same thing. This is why it is so important to take action to prevent foreclosure because it can be very stressful.