Saturday, February 28, 2015

Should You Sell Your Home Before You Buy—or Wait?

Should You Sell Your Home Before You Buy—or Wait?
If you are a current homeowner that wants to purchase a new home, you're most likely asking yourself a question common to folks in your situation: Should I sell before I buy?
The answer to that question depends on several factors.

Your Personality

Just the thought of having two mortgage payments—even for a short period of time—can cause massive anxiety for some people. Even if your lender has assured you of a simultaneous close on the two homes, uncertainty may linger.
Then, there is the pressure to accept an unattractive offer just to ensure that the home sells in time. If you wait to buy, you'll have the luxury of being able to negotiate offers as they come in.
If you crave certainty, you should probably wait until the current home sells to take on the purchase process.
There are, however, those who deal with uncertainty better than others. If that describes you, then starting the purchase process before you sell your current home probably won't faze you.

Your Finances

Regardless of your personality, if you just don't have the money to support two mortgage payments at the same time, then you have no choice but to sell your home before you purchase another.
Further, if you need the proceeds from the sale of your current home to use to buy a new home, you'll need to wait until after you sell, or attempt a simultaneous close. (We explain that process below.)

The Market

A seller's market is the ideal situation when you're selling your current home, but it can be difficult if you hope to purchase at the same time. In a seller's market—where there are few homes available and lots of buyers competing for them—sellers are in the driver's seat. With multiple offers coming in, homeowners are not likely to accept an offer that is contingent upon another home selling.
On the flip side, in a hot seller's market, homes that are in good condition and are located in decent areas will sell quickly.  If your house is among them, you take on little risk if you wish to purchase a new home before selling your current one.
Ascertain if the current market caters to sellers or buyers before making the decision of whether to buy before your house sells. Your real estate agent is your best source for this information.

Achieving the Simultaneous Close

Selling one home while purchasing another can be a bit of a balancing act. If you try to time the closings to occur during the same period, you run the risk of ending up with two house payments at once.
If you allow too much time between closings, on the other hand, you may find yourself renting a temporary home and, thus, moving twice.
The ideal situation is to plan for a simultaneous closing, where both transactions occur on the same day. However, this process comes with risks, too. If anything should go wrong on the first transaction you could end up not being able to close on the second.
For the simultaneous closing process to go smoothly, it's important to choose the right buyers for your current home. How much do you know about their finances? How firm is their offer? What do you know about their motivation to purchase? How badly do they want the home?
Since the process is a bit like a string of dominoes, and the buyer of your home is the lead domino, it's crucial to choose a buyer you know will consummate the deal.
The key to success is hiring an experienced, professional real estate agent. Your agent can guide you through the process and steer the transaction to keep it on course.

Friday, February 27, 2015

Family Mudroom Design

Family Mudroom Design
The family mudroom is, without question, one of the highest traffic areas in the home. It battles all sorts of external elements, from rain and snow to dirt and mud. It houses countless miscellaneous essentials, including shoes and boots, jackets, umbrellas, scarves and more. It is home to pet necessities and sporting equipment. It's where kids drop their backpacks and parents discard car keys or unload shopping bags.
For all these reasons, when planning the family mudroom design, it's important to select interior finishes wisely, maintaining organization while also personalizing the space for the entire family.

Select Smart Interior Finishes

Choose a satin or semi-gloss paint as opposed to a flat finish. These options make cleaning a much easier task. Also, if you've got pets and younger children in the home, consider selecting a darker wall color instead of a lighter one that will show even the slightest bit of dirt or discoloration.
Flooring will probably be the most critical decision you make regarding interior finishes for your family mudroom. Choose a weather-resistant surface that is also easy to maintain and keep clean. Ceramic tile, wood, or natural stone varieties such as slate make great durable options. Add an area rug at the entry for taking off soiled shoes and to help absorb moisture.

Organization Through Design

Individual lockers or cubbies for each family member are a great way to keep personal items separate and tidy. Large wall hooks are an inexpensive option for organizing jackets and handbags, and custom cabinetry or closets are fantastic if the budget permits.
A bench of some sort is a must for putting on shoes, and don't forget to utilize the space beneath for added storage. Wicker or cloth baskets come in a variety of sizes and colors and are a great way to keep scarves, hats or even pet toys organized in a stylish manner. Consider wire baskets or even galvanized tubs to capture a rustic, vintage look. Don't forget to use your vertical wall space for added shelving and additional orderly storage opportunities.
Key hooks ensure house keys and car keys are accounted for at all times and a central docking location is a great way to guarantee cell phones and tablets are charged up as family members rush out the door to begin their busy days.

Go Ahead, Personalize It

Organization doesn't have to be dull! Mudroom design for a family should take into account each family member and their individual needs and interests. If you decide to utilize personal cubbies or lockers, choose fun paint colors that complement each personality. Instead of labeling wicker or fabric baskets in a traditional manner, consider inserting photos of Dad, Sis or even Fido to define ownership in a fun way and further inspire tidiness.
When designing a mudroom for your family, remember to make wise decisions and remain organized. Be sure to have some fun in your selections as you create a personal yet functional space.

Thursday, February 26, 2015

Wednesday, February 25, 2015

Buyers Beware: 3 Points to Ponder About a Home's Location

Buyers Beware: 3 Points to Ponder About a Home's Location
When buyers are on the hunt for a new home, they're usually very focused on one thing: the house. Buyers can lose objectivity if they fall in love with one, and the thought process becomes akin to one of those romantic photos with fuzzy edges—the only thing in focus is the house.
What those fuzzy edges obscure, however, is just as important as what's in focus. So, be sure to identify the impractical features of a home you love—not only for your own comfort and enjoyment, but for the home's future value as well.
"Location, location, location" isn't just a silly real estate mantra—it's a warning. Pay heed to the neighborhood and surroundings if you want to avoid losing money when you sell the home.

1. School District

Not everyone can afford the higher cost of homes in a quality school district, but we can avoid purchasing a home in a district that will make it difficult to sell in the future. Even homebuyers without children should look into the area's schools before signing on the dotted line.
For homebuyers with children, good schools are at the top of the list, according to Realtor.com, and many are willing to go over budget to purchase such a home.
Experts agree that homes are worth more in good school districts. What they can't seem to agree on, however, is how much more. One study claims that the added value is $16,000 on average. Another study, from the Brookings Institute, says homes in quality school districts may fetch up to $205,000 more than those in a low-scoring district. Finally, another expert says to simply slap a 23 percent premiumonto a home in a good school district.
Whatever the amount, savvy buyers know that an area's schools will have an impact on a home's future value.

2. Vacant Land

Being surrounded by open space is lovely, isn't it? The peace, tranquil views and that feeling of seclusion one derives from living in such a location is worth paying more for—or is it?
Nearby government set-asides of open space are in demand for homebuyers. Privately owned vacant parcels, however, should raise red flags.
Even current zoning of parcels isn't set in stone, as neighbors in a Minneapolis suburb learned last year. Most homeowners in a 25-year old subdivision there purchased their homes because the area was surrounded by open space. What they failed to realize, however, was that the surrounding parcels were zoned for commercial development. In fact, many of the newer homeowners were shocked when they learned of the city's plans to approve the construction of a 24-hour superstore right across the street. Their lovely, wooded neighborhood would now be expected to handle three times the vehicular traffic, round-the-clock hustle and bustle, and late-night deliveries to the back of the store, which happens to face the neighborhood.
Before you decide to purchase any home that has vacant parcels of land nearby, it would be wise to check the neighboring property's zoning.

3. Neighboring Homes

It's easy to become smitten with the cutest house on the block, but if that house is the only cute one in the neighborhood, you may want to consider your purchase more carefully.
Foreclosed homes, certain commercial concerns (funeral homes and power plants, for example), messy, neglected yards, and a sex offender in the area can all drag down the value of nearby property, according to the Appraisal Institute. That reduction may be as much as 15 percent.
Experts with the Appraisal Institute suggest taking a leisurely tour of the neighborhood. Something as simple as shoddy landscaping or peeling paint on a building can knock 5 to 10 percent off the value of nearby homes, the Appraisal Institute's president, Joe Magdziarz, told MSN Money.
Folks in the real estate industry are quite diligent when it comes to recommending various inspections and tests of structural elements to buyers. Many agents, however, may neglect to counsel their clients on the financial aspects of the purchase.
Your home is also an investment and requires due diligence to ensure that it's a viable one. Do your homework, beyond admiring the snazzy kitchen and dreamy master bedroom, and you'll sleep well knowing you made an informed investment.

Monday, February 23, 2015

Interior Decorating, Farmhouse-Style

Interior Decorating, Farmhouse-Style
Farmhouse décor offers a relaxed, casual and charming feel. It perfectly combines old and new elements for an eclectic look. A farmhouse interior is warm and inviting while also being practical.
Whether you're a true country dweller or simply love the look and feel associated with its laid-back style, bring the charm of the farm to your home.

Design Elements

Natural design elements are heavily represented in farmhouse homes. Exposed and distressed beams and ceilings are common features along with crown moldings, wainscoting or other wall paneling.
Natural wood flooring is a must. Leave them plain or consider giving the floors or wood wall paneling a whitewashed or distressed look. Also, incorporate oversized windows where possible. Farmhouse homes tend to let natural light flood their interiors.

A Farmhouse Kitchen

A modern farmhouse kitchen remains warm and inviting yet practical. Choose between either clean or weathered whites for cabinetry and dishware. It's also common to refurbish cabinets and choose colors such as buttery yellow or pale blue.
Butcher block countertops are also a farmhouse favorite, and an apron-front sink screams farmhouse kitchen. Consider incorporating some glass cabinetry to neatly showcase some of your antique favorites, and include open shelving to easily access essentials such as pots and pans or mason jars filled with flour or sugar. These elements will add charm while still remaining practical.
In open floor plans, a large wooden dining table enhances the inviting and classic qualities of farmhouse style. Stainless appliances and hardware in bronze or brushed nickel add subtle modern touches.

Furnishings

Consider browsing antique shops or flea markets for special pieces such as large iron bed frames, wardrobes, buffets, chests or hutches. Focus on blending eclectic items as opposed to purchasing furniture in sets. For example, an oversized wooden dining table is a must, but consider adding mismatched rustic chairs to enhance the casualness associated with farmhouse décor.
Living room furnishings should be welcoming and relaxed. Comfortable cotton sofas are often seen adorned with simple slipcovers, which again enhance a sense of informality. Accent with a reclaimed or reupholstered chair, chairs made from other natural fibers such as wicker, or even a classic wooden rocker dressed with a hand-stitched quilt.

Farmhouse Décor

When fine-tuning your farmhouse décor, remember to incorporate vintage pieces that were also utilitarian such as old milk jugs or wire egg baskets. Display antique china in refurbished, weathered hutches, and consider antique pitchers in lieu of a modern vase. Use clear or colored mason jars to store everyday essentials or display cut flowers or tea lights. Antique scales or canister sets can be charming additions to exposed shelving. Old wooden milk crates, wicker baskets, and galvanized metal buckets or watering cans add immediate rustic charm. Frame vintage photos in eclectic frames and add antique signs, mirrors or clocks to walls.
Replicate farmhouse style in your home, and craft a relaxed environment that exudes incomparable charm.

Saturday, February 21, 2015

What You Must Know About Insurance When Buying a Home

What You Must Know About Insurance When Buying a Home
Purchasing a home involves getting to know a lot of financial terms and processes that most first-time homebuyers have never been exposed to. One of the most confusing is insurance. If you've never owned a home before, your familiarity with insurance most likely centers around auto insurance, health insurance, life insurance and, perhaps, renter's insurance.
Even then, your level of familiarity may be minimal, if you are like most Americans. In fact, a mere 14 percent of those who have health insurance understand even the most basic insurance jargon, such as deductibles, co-payments and co-insurance, according to a study published in the Journal of Health Economics.
The various types of insurance required in the average real estate transaction are even less understood, so let's take a look at them and get you up to speed.

Title Insurance

Title insurance comes in two varieties: a lender's policy and an owner's policy. If you take out a mortgage to purchase the home, your lender will require that you purchase a lender's policy. This protects the lender from anyone else who thinks he is the rightful owner or otherwise has a claim against the property.
Depending on where you live, you may also be required to purchase an owner's title insurance policy. In other areas, the purchase is voluntary.
The issuance of either policy is based on research of the property's title, or the "chain of title" as it is known. The examiner will look at public records, such as deeds, wills and trusts to ensure that the wording is proper and that the names on the documents are correct. She will look for outstanding mortgages, judgments and any liens against the property. She will check easements, look for pending legal action against the property and more.
Should the examiner find problems on the title, they will need to be remedied before the purchase can be completed.
Once the policy is in place, the lender (and you, if you purchase an owner's policy) is insured against unknown heirs coming forward claiming ownership, forged signatures on the deed, mistakes in the public records, and other hidden hazards.

Homeowners Insurance

You may hear homeowners insurance referred to as hazard insurance, but they are one and the same. Again, if you take out a mortgage to purchase the home, the lender will require that you purchase homeowners insurance.
While coverage varies, most policies cover fire damage or loss, theft, wind damage, hail damage, vandalism and more. Some perils aren't typically covered, such as flood and earthquake damage, but there may be supplemental insurance that you can purchase to cover these hazards.
Your insurance agent can help you determine how much coverage you require, based on the loan amount and what it might cost to rebuild the home.
Payments to the insurance company are either kept in an escrow account sent in with your mortgage payment or the homeowner pays the premium on her own – it varies by insurer.
If you suffer a loss, the insurance company will typically make out the check to both you and the lender.

Private Mortgage Insurance

Private mortgage insurance is something most homebuyers and homeowners would love to get rid of, but it's a necessary evil. Without it, many buyers would not be given a mortgage and thus not be able to purchase a home.
PMI is required of borrowers whose down payment is less than 20 percent. Because these borrowers are considered higher risk, the lender needs assurance that it will get its money should the borrower default on the loan.
Because the borrower pays the premium (typically added to the monthly mortgage payment), it seems that the lender is the only party that benefits. Keep in mind, however, that without PMI, lenders would demand a 20 percent down payment. Therefore, the cash-poor borrower reaps an enormous benefit.
The good news about PMI - at least for those with conventional loans - is that you can request a cancellation of the insurance once your loan balance reaches 80 percent of the original value of the home. Unfortunately, borrowers with an FHA-backed loan are locked into paying mortgage insurance premiums for the life of the loan, if they put less than 10 percent down. Borrowers who pay more than 10 percent, but less than 20 percent, can cancel the mortgage insurance in 11 years.
The best people to speak with if you have questions about any type of insurance required during the home-purchase process are your lawyer, your real estate agent and your insurance agent.

Friday, February 20, 2015

What to Look for When Buying an Older Home

What to Look for When Buying an Older Home
Anyone who has visited San Francisco or Cape May, New Jersey knows how beautiful historic architecture can be. In San Francisco, they've even named their stately, restored Victorian homes "Painted Ladies."
But, are these older homes good buys? Considering that most of a home's components deteriorate with age, you may be not only buying a vintage home, but vintage problems as well.
Here's a quick look at some of the more common problems with older homes.

Foundation

It would seem that an old house has done all the settling it's going to do, right? Wrong, according to Page Engineering in Missouri. The rate at which the house settles diminishes over time, but it never completely stops – especially if the house has never been "piered."
Piers are long steel shafts that are driven through the soil and into the bedrock below. This process takes the weight of the home off unstable soil, and the home is less prone to settlement. It's a big job, though, and quite pricey.
Look for cracks in the walls, bulging floors and doors that won't close. These are all signs of possible foundation damage. Not all cracks, however, indicate a problem, so don't be alarmed – let a professional diagnose the situation.
The engineers with Page suggest taking a 4-foot bubble level with you when you visit an older home you're interested in purchasing. Use the level to check the floors and walls. If any of them are out of level, have the house checked by a structural engineer.

Electrical System

A home's electrical wiring system has a life expectancy of about 40 years, according to Mike McClintock, home repair writer with the Chicago Tribune. Safety risks increase when the system ages beyond this limit, he warns.
If the home was built between 1920 and 1950 and has never been remodeled, it may still have knob-and-tube wiring, which is considered incapable of handling today's electrical loads.
Some home insurers won't cover a home with this type of wiring and will insist that it is replaced before insuring the home.
Your home inspector should be able to determine what type of wiring the home contains and its condition, at least in visible areas.

Plumbing

Old houses typically have old pipes. If the house you have your eye on was built before 1960, the pipes may be made of steel or cast-iron. These materials corrode, decay and rust over time. Cast iron pipes are notorious for becoming clogged with mineral build up.
Determining the type of pipes in the home is challenging because so much of the system is behind walls. A plumbing contractor inspection is your best bet, and even then you may not learn about all of the pipes in the house.
"Replacing old pipes in a 1,500-square foot, two-bathroom home costs $4,000 to $10,000, and requires cutting open walls and floors," claims Joe Bousquin at HouseLogic.

Roof

The last thing most homebuyers look at when they drive up to a home for sale is the roof. It's easy to be distracted by charming landscaping and attractive paint colors, but it's imperative that you take a good, long look at the home's roof.
Sagging is a sign that a roof is holding too much weight. This can happen when new roofing is installed over old roofing or from prolonged contact with a significant layer of snow.
If you know you'll be looking at older homes, take along a pair of binoculars. Before entering the home, look at the roof from the curb and determine whether the chimney and rooflines are straight.
Next, check the shingles. If they aren't flat and instead curled or cupped, they may need to be replaced.
Ask the homeowner the age of the roof. Although the lifespan of a roof depends on several factors, if it is wood, tile or asbestos and over 15 years old, you may need to replace it in a few years.
Since a new roof may cost upwards of $8,000, it's important to have the home's roof inspected before obligating yourself to purchase the home.
While it's highly doubtful that a home built in the mid-1800s still retains original components, you'll need to inquire as to the last time these elements were replaced.
Other problems you may find in an older home include:
Lack of storage
Lack of natural light
Inadequate insulation (thus higher heating and cooling costs)
Small kitchen
While all of these items can be rectified, the cost to do so should be factored into the price of the home.
That the craftsmanship and materials of an older home have stood the test of time is a testament to its quality. But few things last forever, and a home inspection, using the appropriate contractors, is a must when considering the purchase of an older home.