Remember that a Home Sale is a Busines Transaction

Last month, a woman in Florida was in the news because she decided to put both her house and her heart up for sale as a package deal.

The woman is willing to sell her almost 2000 square foot home along with her hand in marriage. She was having trouble on the dating scene and anticipated trouble with selling her home in the current housing market.

A man in Australia has also made the news because he decided to sell his entire life, including his house, vehicles and introductions to his friends.

A while back, I wrote about some other unusual home selling incentives and it seems that these incentives are getting quirkier and quirkier.Selling a house is a business transaction. Yes, there is an emotional side to it, but it is best to remain professional.

With the expert advice of a good real estate agent, you should be able to sell your home, without offering friendship or romance along with it. If you are having trouble selling your home, feel free to contact John Day at: john.day@longandfoster.com.

Buying a Model Home, part 2

Earlier this week, I mentioned that it is possible to buy the model home in a housing complex. If you decide to go this route to get a better deal, make sure you look out for your best interests. At best, a model home has been built with the best of everything. At worst, a model is sloppily built since it is intended for show.

If you buy a model home, you should:
Ask for credits. Since it is used, you’ll want to get as many credits as you can. You may need to request new paint, flooring or carpets because people have been trooping through the model for months.

Get an inspection. Make sure the structure is indeed sound. Be certain that the builders did not cut any corners in constructing this home.

Verify the warranty. Find out what kind of coverage you have before you agree to purchase.

Get it in writing. Like any other home purchase, you'll want to get all agreements in writing. And you want to make sure that everything is included down to the finest details.

Safe Grilling

If you are grilling outside of your house this Fourth of July holiday, make sure you are doing so safely. Your yard is an extension of your home and it pays to take precautions before throwing stuff on the grill.

Here are some tips for safe grilling:

-Place your grill on a spot where the ground is even.

-At a minimum, you should set the grill up four feet away from any structures. Of course you'll place the grill away from your house, but you also need to keep it four feet from lawn furniture and swing sets.

-Be careful with oven mitts because you don't want them to catch fire. If you can, get a high-heat silicone mitt and avoid cloth.

-Use utensils designed for grilling.

-Keep a spray bottle filled with water nearby to quickly dampen any flames that shoot up. If a flame shoots up, aim the spray under the food.

-Make sure people playing games that involve running/jumping steer clear of the grill.

-Start the bug patrol early. Spray for insects or put out citronella candles, bug zappers, etc. the day before your outside event.

Buying a Model Home, part 1

People who are looking for a deal may go into a furniture store and buy the floor model of a couch or dresser. Did you know that you can do the same thing with a home? Yes, you can buy the model home is a housing complex or condominium.

If you are buying home in a newly built housing complex and there is a model home there, you may be able to buy that home. Just know that you are not buying a brand-new home, since the model home will have seen some wear and tear. Since it is meant to be a showpiece, some builders put little thought into constructing a model and a lot of thought into decorating it. Other builders, however, put extra care into a model because they know that its quality will attract buyers.

Since the model home is not brand-new, you can use this as a bargaining tool when it comes to negotiating a price. Much of what is in the model is something that the builder can write off as part of their marketing budget, so don't be intimidated.

Check back on Friday to read more about how to successfully purchase a model home.

Make Your Move Earth-Friendly

Is it possible to move to a new home in an environmentally conscious way? Yes, it is. While you will still likely need a vehicle that consumes gas to move, there are other ways to consider the Earth as you transition to a new home.

Here are some tips to have a "Green Move"--

Recycle prior to moving
Get rid of things you don't want by donating them or having a garage sale instead of transporting it to your new home.

Use green cleaning products
Clean out your old and new residences with products that aren't harmful to the environment

Pack your stuff in used cardboard boxes
Many people do this to save money, but it also helps the environment. Just make sure the boxes are sturdy. Supermarkets and liquor stores often have boxes available

Pack with greener materials
Rather than use plastic bubble wrap, pack with old newspaper or moving pads made with recycled cotton.

Hire a green moving company
Some moving companies are committed to earth-friendly practices like operating bio-diesel trucks or providing packing crates that can be reused.

Be Careful About Your Closing Date

According to one real estate expert the worst day of the year to buy a home is the last Friday in May. You may wonder just how someone could come up with a certain day and name it the worst. I can tell you that after many years in any business, you start to see patterns.

After years in the business this real estate professional has seen how closings scheduled near Memorial Day end up being pushed back. Most people are not available for work. Even those that are have their minds elsewhere. Also, a delayed closing date could have an effect on your interest rate. If you have a locked-in rate for a certain time period, you do not want it to expire.

This expert feels that April is prime time for pending home sales. This makes for a larger number of closings in May. Real estate professionals feel extra pressure at this time of year because their workload is heavier.

Since the Memorial Day holiday has already past for this year, it is not a problem. Still, this is definitely something to think about. Overall, you should consider making sure that your closing date does not fall around any major holiday or three-day weekend. You want a complete and mindful staff working on your behalf.

Prepare for Home Ownership

While it is possible to wake up one morning and decide that you want to buy a home, the process may go more smoothly if you prepare.

If possible you should look at your finances a year before you want to purchase a property. This means looking at your credit reports, getting your FICO score and doing your best to eliminate debt. You may not be able to do this a year ahead of time, but that doesn't mean you cannot do some of these things in the months before you start home shopping.

Once you have a picture of your credit situation, think about how much house you can afford. Crunch some numbers and play with a few different scenarios. Look into the related costs of home ownership, not just the mortgage. Think about how much you'll need to save for emergency repairs and property taxes.

Seek the advice of experience real estate professionals, rather than laypersons. One young person told me that they were advised to buy the most house they could afford. This may not be the best strategy. If you go out and get the biggest mortgage you think you can afford, you can run into trouble later.

Documenting Your Home and its Contents for Insurance Purposes, p.2

On Wednesday, I wrote about the importance of document your home (inside and out) so that you have an inventory for insurance purposes in case of natural disaster or emergency. Here are more tips for documenting you home and its contents:

In addition to big ticket items, you may not even realize the amount of smaller items you have in your home collectively, they are quite valuable.

Here are some tips for photographing items in your home:

-Use the date stamp so you can demonstrate how recently the pictures were taken. You should update your photo inventory every five years.

-Take single pictures of high-priced items. Take close-ups to capture the make and model number of appliances.

-Take panoramic shots of rooms to capture all that they contain.

-Don't forget closets! You want clothes and other items to be taken into consideration when damages are calculated.

-Keep your photo inventory in a fireproof safe-deposit box that is not kept in your home. You can leave it with a relative or friend. Or you can keep it in a safe-deposit box at your bank.

Documenting Your Home and its Contents for Insurance Purposes, p. 1

Of course you'd rather not think about things like natural disasters or other emergencies that could hamper your ability to live in your home, but it is better to consider them when they have not occurred than to deal with them if they do.

One way to protect your assets is to photograph them. True, you may have receipts for big tickets items, but if for some reason you can't get to those receipts. you'll still want to have a record of what was in your home. Plus, the receipt may not tell the full story; information like the make and model number of an appliance, for instance may not be on a receipt. The more information you can give to your insurance adjuster, the better.

Besides photographing the contents of your home, you can also make a video of your home and of the home itself. This means that not only are you documenting what is inside, but you are also documenting how your home looks on the outside. Things on the outside like fences, gates, swings, gardens matter just as much as what is on the inside.

Feds Catch Up With $10M Mortgage Fraud Ring

Last week I read about how federal agents in Maryland arrested a group of people in a $10 million (or maybe more) foreclosure fraud ring. One government official referred to it as the worst mortgage fraud scam in Maryland history.

The Metropolitan Money Store promised to help people saved their homes from foreclosure, but instead they cheated people out of their homes and pocketed the profit. They allegedly told hopeful homeowners that they would find someone to buy their properties so these financially strapped homeowners could get their credit in order.

What they really did was take out overpriced mortgages on the homes. They allowed the homes to go into foreclosure by not paying on the inflated second mortgages, after they had gained money from the equity that remained in the home.

If you are afraid that you cannot pay your mortgage, seek the help of a trusted real estate professional. Someone who can help you talk to you lender, rather than taking out a second mortgage when the first mortgage is already in jeopardy.

You can always feel free to e-mail me with your mortgage concerns: john.day@longandfoster.com.

Going After Buyers who Fit the Bill

In a post earlier this week, we talked about how one way to get around neighborhood eyesores is to look for buyers who won’t mind that sort of thing. You may have thought, "What kind of buyer wouldn't mind an eyesore?" Well, beauty and eyesores are in the eyes of the beholder.

You may not like the hot pink house next door or the house down the street with all of the lawn statues, but someone else will think it's great. If your neighbors are going for a funky, artistic look, then you and your real estate agent can go after buyers with an eclectic sense of style.

When you are ready to sell, you may think that all you need is a reasonable offer from anyone. This is true, but you may sell faster if you know just who will be likely to buy your home. Think about what kind of buyer will be attracted to your home and the surrounding area. Then you can put up notices in coffee shops or grocery stores or whatever venues are frequented by people who fit your buyer profile.

Home Improvements that Will Help Sell Your Home

Experts say that more than anything, fixing the basics is what helps a home sell quickly. If you want to sell your home and there are basic things that need improving, start there first. If there are only a few basics that need improving, then you may want to upgrade some other areas just to add extra appeal.

Painting is the one improvement that helps whether you have a lot of work to do on the house or just a few adjustments to make. A fresh coat of paint will do wonders for any home.

The improvements you make will also depend on what is standard for where you live. So do your homework before diving headfirst into a lot of home improvements.

Here are some basics:
Replace leaky windows
New siding
Fix old gutters
Replace roof
Repair plumbing issues
Fix electrical system
Repair broken fence
New bathroom (if there is only one)

Here are some extras:
New Deck or sunroom
Additional bathroom (if home already have more than one)
New outdoor lighting
Swimming pool

Are You Your Neighbor's Keeper?

When a homeowner gets ready to sell a home, they spend a lot of time and energy on sprucing up their property. But be aware that your property is not the only on that potential buyers are looking at when they consider purchasing. They are looking at your neighbors' homes as well.
What do you do if a house on your street looks absolutely horrible or is unkempt in some other way?

You can try to talk to the owner, if you feel comfortable doing so.

You can rely on local laws that relate to a property's condition. For example, if your area has a law against someone parking multiple cars on their lawn or laws that prohibit certain exotic pets, you may consider calling the authorities.

We are not advocating these solutions, but merely presenting them as options. Another way to get around a neighborhood eyesore is to seek out the kind of buyer who will not mind that sort of thing. That way you don't have to concern yourself with the neighbor or the government.

Storm Safety Tips

A lot of older people used to cease all activity once a storm began. These days, we figure that modern technology and safeguards are so sophisticated, that we do not need to be so cautious. This probably is not a good idea.

If there is a storm, you should do what you can to make sure that you do not put yourself in unnecessary danger. The phone lines, plumbing and fixtures in your house can conduct electricity if lightning were to strike. Now you don't have to turn off all lights and remain completely still as some people used to do. But you should not take a shower or bath or talk on a corded phone during a storm. It is better to be safe than sorry. Once the storm is over, you will be able to do all of these things. Lightning can do terrible damage to a home, just as any electrician.

If you know a thunderstorm is coming, you can unplug as many appliances as you can before the storm hits. When you know you will be away and thunderstorms are likely, unplug appliances before you leave.

The Latest Celebrity Face of the Foreclosure Crisis

I was saddened to hear that Ed McMahon is the latest celebrity face of the foreclosure crisis. McMahon is 85 and you may remember him for his appearances on the Johnny Carson show and his time hosting "Star Search." McMahon is recovering from injuries and this hampered his ability to earn money pitching various products.

The good thing is that McMahon and his wife have taken a proactive approach to the situation. They have been in talks with their lender. This is the smart thing to do, rather than trying to take out additional loans or lines of credit.

If you are facing a similar situation because of illness or injury, be sure to get the advice of a professional. You should definitely get in contact with your lender, but don't do it all on your own. The advice of someone who is not emotionally or financially tied to your home can be invaluable. You can always contact me at 410-507-2909.

You can also seek the counsel of a HUD-approved expert. Go to www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call 1-800-569-4287 to learn more about HUD-approved counselors.

Incentives for Home Buyers

Sitting in a restaurant the other day, I overheard a conversation about a home sale. One of the people involved was telling her companion about how they had decided to offer to pay a buyer’s rent for a few months to seal the deal. It seems that the buyer wanted to move in before she would be able to move out, so they reached a compromise. This way she did not have to leave before her new home was ready and the buyer got the home he/she wanted, albeit a little bit later than they’d hoped.

If you were not aware of this option, consider it. A while back, I wrote about some unusual homeselling incentives. Some of those methods were a little outlandish. But offering to take care of a few month’s rent for a buyer is not unheard of at all. Don’t let something like a move-in date keep you from selling your home. This is not the type of thing that should have you and a buyer walking away from the table.

An experience real estate agent can help you sort out these kinds of agreements. If you have questions about buyer incentives, call me and my team at 410-507-2909 or e-mail me at john.day@longandfoster.com.

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.

Ask Questions at an Open House

An open house, of course is a time for you to look around and get a feel for a property, but you should do more than just look. You also need to get some information. Ask questions! So many people just tour a house, open a few doors, and try to imagine their furniture in a place. This is fine, but you also need to treat this as an opportunity to research a business transaction because that is what buying a home is, it is business. Talk to the agent who is there. Don’t just let them smile at you and tell you about the granite countertops.

Here are a few sample questions:

1. How long has this home been for sale?
2. How long do homes like this stay on the market?
3. Are there many homes up for sale on this street/block?
4. What’s the average price for homes around here?

Some of the questions pertain to information you could get on your own, but it never hurts to get another perspective. Once you get the agent talking, that person could reveal information that can help you decide whether or not it is worth your time to look at that particular property or that neighborhood.