Sunday, October 3, 2010

Potentially Bad Home Investments

As a home owner, there are routine maintenance projects such repainting the exterior or replacing an old roof. However, there are some who take on projects to increase a home's value for profit. 

According to Yahoo Finance, there are six specific things that don't add value to your home.

1. Swimming Pools
From my experience dealing with various clients, there isn't a huge demand for pools. The majority of people who absolutely don't want pools are families with young kids. Many consider it dangerous unless it's gated. In-ground pools can start at $10,000 and go up, not to mention the monthly maintenance costs. In today's market, pools might add value up to 25k, but it depends on the neighborhood and size of the pool.

2. Overbuilding for the Neighborhood
Even an extensive, grand house can be a sore thumb in a mediocre neighborhood. If the surrounding one-story homes have 2-3 bedrooms, don't build a 5-6 bedroom, two-story home next door. Even though the added square footage normally adds value, most buyers won't pay more when the neighboring house is selling for $100,000 less. Overbuilding just screws up the comps in the area.

3. Extensive Landscaping
Things like dolphin-shaped bush statues or professionally maintained landscaping are great curb appeal, but they are best left to professionals. Potential home buyers might view it as a burden if they can't continue the upkeep. In this buyer's market, don't expect them to see the value when making an offer.

4. High-End Upgrades

If you're going to upgrade the kitchen to brand new stainless steel, granite counters and new hardwood floors, make sure to be consistent and modernize the rest of the home. High end features usually increase values for high end homes.

5. Wall-to-Wall Carpeting
The trend these days are leaning away from carpet. Hardwood floors, tile and stone are the leading floor covering choices. They are easier to keep clean and have a longer life span.

6. Invisible Improvements
It seems self explanatory. If the buyer doesn't see it, they won't pay extra for it. New plumbing or a new heating system makes a home more comfortable, but buyers already expect these things to be in good shape when they buy the home. This shows pride of home ownership, but don't expect to recoup your costs in added home value.

Wise investments that do add value to a home include warm and inviting decor and neutral color schemes. A tip to sellers is to walk through homes for sale in your neighborhood. Get a feel for the trends. If all the homes have granite and dual-pane windows and yours has tile counters and windows from the 80's, that's a good indicator of where to start upgrading.  

Saturday, October 2, 2010

How Long Does Escrow Last?

Before you give notice to break a lease, sell a home or hire movers, make a mental note of these typical escrow time frames.

Conventional Loans: 45 days 
FHA: 50 days 
VA: 62 days
USDA: 90 days
Short Sales (after lien holder approval): 45 days*
REO/Foreclosure: 47 days

Remember these are just the current average time frames. Your Realtor and lender will give you updates along the way to give you a good idea when you can close escrow.

*Short sales can take around 6 months to become approved for sale by the bank. After lien holder approval, escrow can officially open.

Friday, October 1, 2010

Home Prices Slashed

Home prices are plummeting in the Greater Seattle area. This clip from KOMO News gives a good idea how much your home might have dipped.
 Zip Realty on KOMO News

Also check out Zip Realty's "Sale Rack" to see where you can get a good deal!
Click here for Housing Sale Rack

Wednesday, September 29, 2010

The Widely Known Hidden Costs to Purchase a Home

With the insane housing market "sale rack" going on, buyers are definitely saving up for their down payment. However, it's not just saving for the down payment. Here is a simple break down of how much money you'll need before signing on that dotted line.

Earnest Money Deposit (EMD)
A buyer's EMD check is the key to opening escrow.For resale it's typically between 1-3% of the home price. For new construction, it sometimes depends on the builder and the home price.

Down Payment
FHA loans are currently 3.5% down. Conventional loans are typically 10-25% down depending on your credit. VA loans are 0% down. Check out your city or county programs for housing assistance programs, as well.

Home Inspection
This is paid directly to the home inspection company at time of service. Costs depends on who you choose and the home square footage. Fairly inexpensive.

Appraisal Fees
Unless it's an all cash deal, lenders will require an appraisal, which is usually a few hundred dollars, or more depending on home square footage.

Closing Costs
Always estimate high as these costs are all over the map from 1% to 8%. Your initial deposit could go toward this, but usually costs range between 3-4% of your loan.

Your lender is required to provide you with a Good Faith Estimate (GFE), which will break down all the costs line by line.

Here's an example of a $200,000 home:
Earnest Money Deposit (1-3%): $2,000-$6,000
Down Payment FHA (3.5%):     $7,000
Down Payment (10-25%):         $20,000-$50,000
Closing Costs (3-4%):               $6,000- $8,000

When 'Cash-In' Refinancing Pays Off

Typically, when a person refinances their home it's to take money out. Find out when it's a good idea to put money in.

Click Here to Read Story

Saturday, September 25, 2010

0% Down in Certain Rural Areas

Find a Home for 0% Down

Are you looking for a home in a rural area? Do you want a Zero Down Loan? King County has a USDA Rural Development loan program. Just click the above link and type in the property address to see if the home will qualify.


Tips to Improve Your Credit Score

Are you in need of credit repair, but don't know where to start? You can begin by requesting a copy of your credit report through the credit bureaus or a credit monitoring service. On your report you can see what is making your score so low. Too many credit inquiries, outstanding balance too close to credit limit and late payments are just a few of the ways your score can dip. Focus on the main issue, and remember it does take time for positive work to reflect on your report.

One of the most effective ways to increase your score is to keep your debt under 30% of your credit limit. Anything above that will have a negative impact on your score.

Limit the amount of credit cards you have. Less is more. The minimum open lines of credit to buy a home or rent an apartment is three, so there's no need to open ten. Also, a mortgage or car lease qualifies as a line of credit that can help your score by adding to the variety of credit types.

Remember your oldest credit card and the one with the least APR% are your best friends. Keep these open and pay them down. They contain your greatest credit history. If you close them all that history goes away and so does your good score.

Overall, if you just maintain low balances and limit your lines of credit you'll be on your way to a more admiral FICO score.